1. Introduction: Capitalism, Crisis, and the Convergence of Systems

With the collapse of central planning and the global decline of communist ideology in the early 1990s—preceded by the wave of neoliberal deregulation in the early 1980s associated with the so-called Washington Consensus—liberal democracies came to be viewed not only as models of modern governance, marked by openness, transparency, and institutional pluralism, but also as systems capable of guiding countries such as China and, later, Russia toward a liberal worldview grounded in free-market economics and democratic governance.

After an initial period of reform—primarily in the economic sphere—beginning in China in the early 1980s and later in Russia in the early 1990s, developments appeared to support the anticipated trajectory of convergence, broadly continuing until the mid-2000s. However, the post-2008 Great Stagnation marked a decisive turning point, dispelling the “liberal fallacies” rooted in overoptimism and ideological faith in inevitable convergence. Not only did several countries once expected to converge begin diverging from liberal democratic norms, but many established democracies with market economies also started adopting features traditionally associated with authoritarian governance. Moreover, regimes long regarded as illiberal—such as China and Russia—demonstrated remarkable adaptability by integrating market mechanisms, digital innovation, and populist rhetoric into their authoritarian rule. Taken together, these developments underscore that liberal and authoritarian regimes are not merely coexisting but, in significant ways, are converging.

That is, as liberal regimes increasingly adopt features characteristic of illiberal governance, illiberal regimes have, in turn, successfully integrated into the market and globalization processes driven by corporate capitalism, while maintaining their authoritarian political systems. This two-way process—referred to in this article as reverse convergence—is rooted in a common underlying factor: the systemic crisis of corporate capitalism.

Economic activity, which ought to be embedded within society and regarded as an integral part of social life (Polanyi, 1944; Braudel, 1982; Block, 2003; Sandel, 2012), has instead come to be perceived as a narrow, detached sphere shaped by the immunization of the corporate capitalism (Greider, 1992 & 2003) through “financial fundamentalism” that Vickrey (1998) warned against. Increasingly, it is viewed as a domain dominated by elites, operating contrary to the broader public interest—or at least perceived as such by large segments of society.

Especially in the aftermath of the 2008 financial crisis, this perception has fueled a countermovement marked by diverse forms of critique. Despite their ideological differences, these critiques converge on a common theme: the call to restore the will of the “virtuous people” against unaccountable elites (Mudde, 2004; Laclau, 2005; Müller, 2016; Norris & Inglehart, 2019)—a formulation closely aligned with the core definition of populism. In this sense, the global reaction against corporate capitalism has been effectively appropriated and redirected by authoritarian populist forces (Fraser, 2017; Zuboff, 2019; Piketty, 2020; Brown, 2019).

Recent political and economic developments in the United States (US), the European Union (EU), and China—where these transformations are particularly pronounced—reflect dynamics long anticipated by scholars, most notably Karl Polanyi (1944) and Fernand Braudel (1984). Polanyi, through his concept of the “double movement,” explored how societies historically respond to the destabilizing effects of unregulated markets by demanding protective social and political countermeasures. Braudel, in turn, distinguished between market economies and hierarchical capitalism, highlighting how modern economic elites operate within spheres largely insulated from democratic accountability.

More recently, these foundational frameworks have been extended by scholars analyzing the rise of digital capitalism. Zuboff’s (2019) theory of surveillance capitalism, Wark’s (2019) notion of the vectoralist class, and Varoufakis’s (2023) concept of techno-feudalism each offer critical insights into how corporate power, digital infrastructures, and state capture are reshaping the structures of political authority. Building on the approaches of Polanyi and Braudel, this article investigates how structural transformations in global capitalism—particularly under the pressures of digitalization, the expansion of cyberspace, rising wealth and income inequality, and the ensuing populist backlash—have increasingly blurred the boundaries between regime types.

This study uses comparative case analysis to examine the US, EU, and China as key regions where the disruptions caused by corporate capitalism align with the rise of authoritarian populist strategies. Each case offers a unique way of managing, challenging, or exploiting the structural pressures of global capitalism. Through this comparative approach, the paper aims to explain why and how different political systems are increasingly adopting illiberal norms, such as centralized authority, elite entrenchment, and norm erosion, even as they officially support divergent ideologies.

The structure of the paper is outlined as follows. After this introduction, the next section details the theoretical framework behind the concept of reverse convergence. Section 2 examines the contributions of Polanyi, Braudel, and other key scholars, situating their ideas within the context of current global trends. Section 3 presents a comparative empirical analysis of governance patterns in the US, the EU, and China, utilizing policy documents, governance indicators, and regulatory frameworks. The final section presents the normative implications of these findings in a nutshell. The article ends with key policy implications and recommendations.

2. Theoretical Framework: From Liberal Aspirations to Reverse Convergence

The term convergence, rooted in modernization theory, carries the implicit assumption of the superiority of Western civilization and posits an inevitable, linear trajectory toward economic and political development for non-Western societies (Lerner, 1958; Rostow, 1960; Apter, 1965; Inkeles & Smith, 1974). In the classical modernization and democratic transition literature, convergence typically refers to the process by which non-Western or hybrid regimes gradually adopt liberal democratic norms, institutions, and practices. Based on foundational works such as Lipset (1959), Almond and Verba (1963), and Huntington (1991), this framework assumes that economic development, urbanization, higher education levels, and globalization inevitably lead to the establishment of liberal democracy. This optimistic view reached its height with Fukuyama’s (1992) “end of history” thesis, which argued that liberal democracy represents the final stage of political development. Within this paradigm, industrialization, market liberalization, and democratization are conceived as universal and sequential stages that all nations are expected to follow, ultimately culminating in Western-style liberal democracy (Fukuyama, 1992; Huntington, 1996; Inglehart & Welzel, 2005).

Several factors contributed to the optimism surrounding convergence theories (Fukuyama, 1992; Lipset, 1959; Peerenboom, 2007; Redding, 1999; Witt, 2019). The political transformations and market reforms witnessed in the early 1990s—most notably the collapse of the Soviet bloc, the global decline of communist ideology, and the acceleration of neoliberal globalization—appeared, at the time, to vindicate these ideological assumptions (Tipps, 1973; Tausch & Heshmati, 2012). This sense of vindication was reinforced by the integration of China and Russia into global economic institutions such as the World Trade Organization (WTO), based on the belief that economic liberalization would naturally lead to political liberalization (Rueschemeyer et al., 1992; Peerenboom, 2007). Beyond these cases, Japan’s “developmental state” crisis heightened expectations of its further systemic convergence with liberal market norms (Yamamura, 1997). Similarly, recent late-development cases—such as South Korea and Singapore—appeared to support this trajectory by gradually aligning with both market mechanisms and democratic values. Finally, in the early 2000s, the rapid diffusion of digital technologies, the expansion of global trade, and the integration of emerging economies into global value chains reinforced the belief that capitalism and globalization would naturally produce both market-driven growth and democratic consolidation (Friedman, 2005).

However, recent developments have revealed that such deterministic expectations underestimated the adaptability of authoritarian systems and entirely excluded the possibility of reverse convergence, whereby liberal democracies and authoritarian regimes increasingly share structural and functional similarities. As Riggs (2020) observes, understanding the convergence of liberal and authoritarian systems requires a long-term historical perspective on the evolving relationship between capitalism and governance. Among other factors, the rise of deregulated corporate structures has led economic activity to become increasingly disembedded from society. In this context, growing perceptions that economic systems function primarily as mechanisms for wealth transfer to a narrow elite have fostered a widespread “search for a savior” mentality.

Amid this ongoing normative shift, illiberal regimes such as China and Russia have resisted democratization and instead consolidated sophisticated forms of illiberal capitalism (Pei, 2016; Dickson, 2021; Grumbach, 2022). At the same time, liberal democracies—including the US and EU member states such as Poland and Hungary (and, more recently, Italy, Austria, and the Netherlands, where similar pressures are emerging)—are increasingly adopting illiberal norms in governance. These include the centralization of executive power, erosion of judicial independence, suppression of dissent, and algorithmic surveillance, often legitimized through populist-nationalist rhetoric advocating empowerment of “ordinary citizens” (Levitsky & Ziblatt, 2018; Guriev & Treisman, 2022; Runciman, 2018).

This process of reverse convergence—in which liberal democracies increasingly resemble authoritarian systems in institutional logic, political discourse, and governance mechanisms—manifests in populist attacks on the opposition (Mounk, 2018; Mudde & Rovira Kaltwasser, 2017), executive aggrandizement (Bermeo, 2016), algorithmic governance (Zuboff, 2019; Ye, 2022), and recurrent violations of international norms (Ikenberry, 2018; Krastev & Holmes, 2020).

Polanyi’s concept of the double movement, which illustrates how societies adopt protective measures as unregulated markets weaken social bonds, and Braudel’s distinction between market economies and hierarchical capitalism, which emphasizes the tendency of economic power to move beyond democratic control, offer valuable long-term guidance for understanding these developments. The next section will briefly review Polanyi’s and Braudel’s core arguments and predictions, then integrate these insights with current trends—particularly the rise of authoritarian populism in an emerging multipolar world order—culminating in what I call reverse convergence: a hybrid regime dynamic driven by the intersecting forces of corporate capitalism, digital transformation, and geopolitical realignment.

2.1. Karl Polanyi on Market Disembedding and Social Disruption

While the free market's ability to efficiently allocate resources and promote innovation is widely recognized in mainstream economic literature, overly lax or unregulated free market policies can pose serious risks to society. Considering that observance, Polanyi coined the term "double movement" to explain, on the one hand, how a self-regulating market economy, if left unchecked, would inevitably undermine human society, and, in turn, on the other hand, the same process prompts a societal countermovement to restore social protections. In his words, “the people” try to re-embed economic activity and regulate the market through a protective reaction.

Polanyi contends that the issue is not the existence of markets but their disembedding from social, political, and ethical constraints. When market logic is applied to essential areas like labor, land, education, and healthcare—treating them as “commodities” driven solely by supply and demand—it undermines social cohesion, democratic institutions, and human dignity. Therefore, unchecked marketization often leads to extreme inequality, environmental degradation, and the erosion of collective protections. These effects are more likely to trigger a societal backlash, as individuals and communities seek shelter from the volatility and insecurity imposed by market forces.

 What is central to our topic in this article is that, ironically, such backlash can open the door to illiberal or authoritarian political responses, as people turn to strong leaders who promise protection and order. In this way, the dangers of excessive free market policies lie not in economic failure per se, but in their capacity to destabilize the social fabric and provoke anti-democratic reactions. That is, this countermovement—conservative and protective in nature—can manifest in both benign and harmful forms. For instance, the laissez-faire capitalism of the 19th century led to severe societal disruptions, prompting a range of responses in the early 20th century: fascism, exemplified by Hitler’s ultra-nationalist dictatorship; socialism, as seen in Stalin’s regime marked by mass deportations and killings; and Roosevelt’s so-called New Deal reforms, which sought to regulate market forces through welfare-state democracy. Although all these efforts were framed as attempts to “protect society from the disruptive force of unfettered capitalism” (Gerbaudo, 2022), they had profoundly different implications for human freedom and dignity.

Applying Polanyi's framework to our era, we can view the post-1980 wave of neoliberal globalization, known as the Washington Consensus, as a new phase of market expansion — a process of disembedding markets through deregulation, privatization, and global integration. This era externalized economic costs in pursuit of efficiency: industries relocated to low-wage regions, capital moved freely across borders, and domestic constraints on business (labor unions, regulations) weakened. This "efficiency" economy, marked by the collapse of the former Soviet Union and the opening of China, with its huge surplus and cheap labor, also produced growth and consumer benefits for a time. However, the process of unchecked economic globalization and deindustrialization ultimately weakened job security, harmed local communities, and reduced social equality even in developed countries. This left many people feeling “left behind” or “forgotten,” and laid the groundwork for the socio-economic roots of populism. A significant body of research shows that this increasing sense of exclusion and economic dislocation has been a major trigger for modern populist movements (Autor et al., 2020; Colantone & Stanig, 2018a, 2018b; Goodhart, 2017; Rodrik, 2018; Inglehart & Norris, 2019).

 More recently, the 2008 financial crisis—also known as the Great Recession—can be interpreted as a collapse in the legitimacy of the neoliberal order, prompting public demands for protection against what was perceived as “excessive globalization.” By the 2010s, signs of a Polanyian countermovement—social backlash—had become increasingly visible. However, as in the 1930s, the form of the backlash varied, and economic grievances led to a surge of nationalism and anti-liberalism. Liberal elites were blamed for the harms of globalization. Populist leaders positioned themselves as defenders against market chaos, often by attacking liberal institutions (courts, media, pluralist politics) that they claimed hindered national revival (Gerbaudo, 2022; Mudde & Kaltwasser, 2017). In many cases, the energy was captured by right-wing authoritarian populists who promised to defend the "real people" from global elites, immigrants, and other perceived threats.

 In other words, instead of a coordinated move toward a more just global economic order, the aftermath saw fragmentation, with each nation or faction pursuing its interests. This created openings for illiberal solutions – from Trump's trade wars to Brexit's retreat from the EU – ostensibly to reclaim sovereignty and protect domestic interests. Polanyi would recognize these developments as a modern double movement, but one in which authoritarian tendencies have hijacked the protective impulse in many places.

2.2. Fernand Braudel: Capitalism Against the Market

While Polanyi examines the dynamic relationship between crisis and societal response, French historian Fernand Braudel challenges the common liberal assumption that capitalism and free markets are synonymous or interchangeable—a myth often repeated in orthodox economic thought. In his structural analysis, Braudel argued that capitalism relies on hierarchy and monopolistic advantages; it “does not invent the market… it merely uses it,” emerging only once state structures and monopolies can be exploited (Braudel, 1982). He also contended that what is often labelled “market liberalism” may conceal a form of rentier-dominated capitalism.

To make this distinction, Braudel differentiated between the market economy—a sphere of transparent, small-scale, competitive exchange accessible to many—and capitalism, characterized by hierarchy, monopolies, and concentrated economic power that often operates beyond the bounds of competition and remains deeply embedded in state structures. Historically, Braudel demonstrated, the true capitalists—merchant bankers, monopolistic trading companies—profited not from open competition but from asymmetries of information and privileges granted by the state, amassing fortunes in the process. In his study of early modern Europe, he observed that the real economic “great predators” operated in an opaque anti-market zone above the competitive fray (Stern, 2018).

This insight parallels John Kenneth Galbraith’s distinction between “the thousands of small proprietors” (market system) and “the few hundred highly organized corporations” (planned corporate economy). In The Open Society and Its Enemies (1945)—a foundational critique of totalitarian ideologies, especially Marxism and fascism—Karl Popper identified the “enemies” of open society as dogmatic systems that reject critical inquiry, condone unchecked power, and undermine rational discourse, pluralism, and institutional accountability. In the anti-market zone where oligopolies and monopolies prevail, supply-and-demand dynamics can be manipulated through political influence, insider knowledge, or overwhelming market power to extract extraordinary profits (Dunn & Pressman, 2005). Braudel further emphasized that the state and capitalism have historically cooperated: major capitalists have depended on state charters, military force, and political connections to secure market advantages (Stern, 2018).

Yet, in a historical paradox, Popper’s thesis can be read as indirectly supporting the critiques of capitalism advanced by both Polanyi and Braudel. However, their analytical lenses diverge: Popper concentrates on ideological threats, whereas Polanyi focuses on the structural consequences of market liberalization—specifically, that excessive market autonomy inevitably provokes socio-political backlash.

Both caution that openness is at risk of erosion, but Polanyi extends this warning by showing how the liberal elite’s failure to regulate capitalism can empower the very authoritarian forces Popper condemns. In periods of crisis, the defensive counter-movement Polanyi describes may assume illiberal forms, manifesting historically in fascism and, more recently, in right-wing populism (Gerbaudo, 2022). In this way, Polanyi deepens Popper’s warning by linking ideological closure directly to the socio-economic dislocations produced by market fundamentalism.

Bringing these perspectives together, Braudel’s anti-market capitalism aligns more with oligarchic control than with the open exchange systems that Popper assumes underpin liberal freedom. In this context, Popper’s optimism regarding market liberalism appears overly idealistic. As contemporary evidence shows, today’s digital capitalism—exemplified by surveillance regimes (Zuboff, 2019) and techno-feudal dynamics (Varoufakis, 2023)—validates Braudel’s claim that economic elites often operate beyond democratic oversight. Together, Popper, Polanyi, and Braudel offer a multidimensional framework for understanding the current global drift toward hybrid regimes. This is the essence of reverse convergence: liberal democracies adopting authoritarian mechanisms, while authoritarian regimes employ capitalist tools for legitimacy and control.

Two critical contributions further illuminate this misconfiguration, one at the macro level and the other at the micro level. At the macro-institutional scale, Joseph E. Stiglitz (2002, 2006) critiques global financial institutions such as the IMF, World Bank, and WTO for promoting market fundamentalist policies—rapid liberalization, austerity, and premature capital account openings—that have repeatedly intensified crises in developing countries (Rodrik, 2011; Blyth, 2013; Pence & Sanders, 2023). At the micro-corporate scale, William Greider (1992, 2006) documents the “dehumanization and commodification of individuals alongside the humanization, sanctification, and even immunization of corporations.” He portrays the modern corporation not merely as a business entity but as a dominant socio-political force that structures everyday life more reliably than politics or religion. As a legally privileged institution, it concentrates decision-making in a narrow managerial–financial elite, displacing broader stakeholder interests.

In Greider’s analysis, these “commanding heights” of corporate power are held not by competitive entrepreneurs but by insiders, large-bloc shareholders, and major financial institutions. Such concentration fosters systemic disorders—asset bubbles, financial scandals, recurring crises—making corporate capitalism self-reinforcing. This cycle produces the inequality and instability that erode democratic institutions, even as state–corporate alliances claim to intervene for “market stability.” Echoing Reverend Emil’s moral critique that “capitalism is an irresponsibility developed into a system,” Greider reinforces Braudel’s, Polanyi’s, and contemporary thinkers’ warnings that capitalism’s dominance is not accidental but institutionally embedded.

These theoretical insights are supported by empirical evidence on the socio-political consequences of neoliberal globalization. The trajectory of those “left behind” by economic dislocation in a survival of the fittest regime—where the social dimension has been neglected—has fueled a populist backlash (Rodrik, 2018; Inglehart & Norris, 2019). While globalization has delivered undeniable benefits—sustained growth, expanded trade, increased FDI, technology transfer, and poverty reduction, especially in China, India, and Vietnam (Dollar, 2004; Dollar & Kraay, 2004; Milanović, 2016)—it has also concentrated wealth and power in multinational corporations and elite networks (Piketty, 2014; Zucman, 2019). Inequality data underscore this concentration: between March 2020 and December 2021, the wealth of the top ten billionaires doubled while economic precarity surged globally (Oxfam, 2022; McKinsey Global Institute, 2021). The World Inequality Report (2022) shows the top 10% capturing over half of global income, while the bottom 50% receive just 8.5%. Such disparities weaken democratic legitimacy, amplify political alienation, and create fertile ground for authoritarian populism.

Structural economic dysfunctions—unemployment, inequality, austerity, and financial instability—generate a chain reaction: disrupting everyday life, eroding trust in institutions, and alienating citizens from democratic engagement. In this sense, the democratic deficit is not merely a political problem but the cumulative outcome of sustained economic dislocations. This reinforces the central thesis shared by Popper, Polanyi, and Braudel: without addressing the structural imbalances of capitalism, democratic vitality cannot be sustained.

2.3. Capitalism in the Digital Age: “Set the Fox to Guard the Henhouse!”

The digital revolution has ushered in an era of unprecedented productivity, connectivity, and opportunity. Advances in cloud computing, artificial intelligence (AI), mobile devices, and the Internet of Things have generated major efficiency gains, expanded global market access, and enabled entirely new business models (Brynjolfsson & McAfee, 2014; McKinsey Global Institute, 2018). Digital platforms have lowered barriers for entrepreneurs, facilitated real-time global collaboration, and provided low-cost or free services to billions, including online education and telemedicine (World Bank, 2016; OECD, 2021).

For corporations, these developments have driven extraordinary gains in productivity and market reach through automation and AI, while diminishing trade barriers and turning large-scale consumer data collection into a central profit driver. Many of globalization’s early promises—accelerated innovation, improved information flows, and democratized knowledge—have partially materialized through digital disruption.

Yet, the economic and political effects on workers and citizens are deeply ambivalent. While these technologies improve logistics, lower transaction costs, and expand consumer choices, they also cause job insecurity, undermine labor rights, and speed up the decline of small local businesses under the dominance of global platforms (De Stefano, 2016; ILO, 2021; Zuboff, 2019). “Free” services often come at the expense of personal data, fueling surveillance capitalism, targeted behavioral manipulation, and monopolistic control over information flows. Such concentration of economic power limits consumer choices, increases corporate influence over public discourse, and enables control over market access and policy agendas.

As Braudel (1982) observed, capitalism’s adaptability allows forces of innovation to reinforce existing hierarchies and monopolies. Today’s anti-market digital capitalism transcends civilizational boundaries, concentrating power in platform oligopolies, data monopolies, and state–tech alliances in both liberal democracies and authoritarian regimes (Foster & McChesney, 2014; Srnicek, 2017; Zuboff, 2019; O’Hara & Hall, 2021). Market concentration is stark: two firms control roughly 99% of the global mobile operating system market; three companies dominate global cloud infrastructure; and a handful of platforms capture most online advertising revenue (CMA, 2020; Synergy Research Group, 2023; Cremer, de Montjoye, & Schweitzer, 2019). These firms act as gatekeepers of commerce, discourse, and visibility—what Braudel might call the “anti-market zone,” where control over bottlenecks overrides competition.

The employment effects of this model are equally striking. Capital- and technology-intensive firms can generate immense market value with relatively few employees. As shown in Table 1 and Figure 1, NVIDIA, for example, has reached a market capitalization of around USD 4 trillion with only 35,000–40,000 employees, making it economically larger than many states with populations exceeding 80 million. Such companies concentrate wealth among shareholders and executives while limiting broad-based employment gains (De Stefano, 2016; ILO, 2021; Zuboff, 2019).

In terms of job and income loss, and, thus, deteriorated income inequalities, since early 2025, AI adoption has been explicitly linked to major layoffs. Tata Consultancy Services (TCS) eliminated 12,000 jobs—about 2% of its global workforce—through automation in coding, testing, and client support (ET Bureau, 2025). IBM cut 8,000 positions, largely in human resources, after launching its AI-powered AskHR platform (Lunden, 2025). The companies Indeed and Glassdoor together laid off 1,300 employees, attributing reductions to AI-driven efficiencies (Vincent, 2025). TikTok’s Berlin trust and safety moderation team shrank by 40% as AI systems and outsourced labor replaced manual reviews (DW News, 2025). Official statistics understate the scale: over 20,000 US layoffs in early 2025 were linked to technological change, with many not formally labeled “AI-related” (US Bureau of Labor Statistics [BLS], 2025). These patterns reveal how AI-driven restructuring can erode labor bargaining power and deepen inequality (Spence, 2025; Haupt & Brynjolfsson, 2025, May 1).

 Beyond economics, the expansion of corporate digital power raises acute concerns for human rights, democracy, and individual freedoms. Pervasive data collection and algorithmic processing threaten privacy, chill free expression, and fuel polarization through curated content streams (Pariser, 2011; Zuboff, 2019). Platform dominance over information ecosystems distorts political competition, undermines pluralism, and weakens civic space (Freedom House, 2023; UN Human Rights Council, 2021).

The blurring of public and private authority further complicates governance. In China, state–tech integration is explicit in the Social Credit System and strict data localization rules (Creemers, 2018). In the United States and Europe, platforms serve as critical public infrastructure—providing cloud services for government agencies and AI tools for law enforcement—while simultaneously ranking among the most powerful political lobbyists (OpenSecrets, 2022; Wu, 2018). This dynamic exemplifies the “fox guarding the henhouse”: those most capable of distorting markets are entrusted with safeguarding their integrity.

Emerging governance models have been theorized as Zuboff’s (2019) surveillance capitalism, Wark’s (2019) vectoralist class, and Varoufakis’s (2023) techno-feudalism, all of which describe new enclosures of the digital commons and the expansion of unaccountable control. While democracies justify regulation in terms of safety and electoral integrity, and authoritarian regimes in terms of social harmony, both approaches consolidate discretionary control over speech and visibility (Bradshaw & Howard, 2019; O’Hara & Hall, 2021).

Bremmer’s (2025) “AI J-curve” concept is instructive here. The decentralizing promise of early digital technology has given way to a centralizing phase, where control over data and algorithms allows governments and corporations to predict and influence behavior with unprecedented precision. These risks inverting the stability curve: autocracies like China’s CPC can harden control, while democracies risk oligarchic capture by tech elites.

From a historical-literary perspective, Orwell’s 1984 imagined Big Brother as the ultimate surveillance state. Today, AI systems could make such totalizing control technologically feasible for the first time. Strikingly, much of the data fueling these systems is provided voluntarily by individuals—through social media, wearable devices, smart assistants, and “free” digital services. This recalls La Boétie’s (1577/1997) notion of “voluntary servitude,” where people actively participate in their own subjugation, trading privacy and autonomy for convenience, entertainment, or connection.

In this context, authoritarian populists and digital oligarchs form a mutually reinforcing alliance: populists exploit engagement-driven platforms to bypass traditional media and micro-target grievances, while tech giants benefit from regulatory leniency and entrenched dominance (Persily & Tucker, 2020; Inglehart & Norris, 2019). Economic and technological disruptions further fuel strongman politics, merging political illiberalism with corporate governance devoid of democratic accountability (Autor, Dorn, Hanson, & Majlesi, 2020; Colantone & Stanig, 2018a, 2018b).

If unchecked, the state–platform nexus—supercharged by AI’s predictive and manipulative capacities—may crystallize into a hybrid model fusing authoritarian populism with corporate techno-feudalism. In such a future, technological progress would primarily serve elite entrenchment rather than public empowerment. Avoiding this trajectory requires structural reforms to curb corporate–state collusion and the advancement of decentralized, open-source AI ecosystems to redistribute informational power. Without such counterbalances, the digital age’s legacy may be one of concentrated rather than democratized power.

2.4. Bridging Theory and Reality: Populism as the Threshold to Illiberalism

The previous analysis has explored the theoretical possibilities of convergence between liberal democracies and authoritarian regimes, highlighting the structural, ideological, and technological factors shaping today’s emerging global order. In this context, populism serves as a strategic link across different regime types, supporting both democratic and authoritarian actors who seek to consolidate power by claiming exclusive representation of "the people." However, this rhetorical tool undermines institutional checks and balances and delegitimizes opposition, whether used in elections or under the guise of performance-based governance (Müller, 2016).

Building upon this, the concept of neo-authoritarian capitalism captures the shared tendencies increasingly observable across East and West: centralized authority, elite entrenchment, digital surveillance, and the normalization of illiberal governance practices. While these trends manifest differently in democratic and autocratic contexts, their convergence is marked by a typical response to the systemic pressures of global capitalism. Both Polanyi’s notion of disembedded markets and Braudel’s critique of hierarchical, anti-market capitalism remain prescient in explaining how legitimacy is eroded and how crises generate top-heavy governance in place of pluralistic deliberation.

What emerges is a post-liberal order in which economic inequality, institutional decay, and ideological vacuums fuel public disillusionment. As Deneen (2024) notes, the erosion of the liberal promise has catalyzed the search for alternative sources of legitimacy, including nationalism, religion, and cultural identity. The result is not uniform authoritarianism, but a selective convergence toward governance models that prioritize control and capital over rights and representation.

This convergence, however, is not inevitable. Although the main trend points to the rise of market authoritarianism, opposition forces remain. From grassroots resistance to populism in parts of the West, to geopolitical responses to authoritarian overreach, the global battle is far from over. Whether liberal democracy can regain legitimacy will depend on its ability to tackle inequality, limit corporate overreach, and rebuild civic trust—all while resisting the pull of technocratic centralization.

The following section examines empirical developments in the US, the EU, and China, analyzing how these global trends unfold across divergent yet increasingly overlapping political and economic landscapes. Each case reveals not only national responses to capitalist transformation and digitalization, but also the structural logic of convergence at work in today’s multipolar world.

3.     Methodological Framework

3.1. Comparative Design

To assess the extent to which the theoretical insights of Polanyi and Braudel, together with contemporary critiques of techno-feudalism (Zuboff, 2019; Varoufakis, 2021), provide a robust conceptual framework for understanding structural shifts in global governance, an empirical and comparative approach is required. This section sets out the methodological foundation for such an analysis, focusing on three principal global actors—the US, the EU, and China—as the main case studies. These cases were selected based on George & Bennett (2005)’s "most different systems" logic, as they represent distinct regime types—liberal democracy, multilateral constitutionalism, and one-party authoritarianism—yet face similar global pressures: digital transformation, economic concentration, and populist political mobilization. By investigating how each polity responds to these pressures, the design reveals structural similarities and functional overlaps that contribute to the reverse convergence hypothesis: the idea that liberal democracies are adopting illiberal governance tools, while authoritarian regimes absorb capitalist instruments to legitimize their rule (Krastev & Holmes, 2019).

To ensure both comparability and depth, the empirical analysis employs a structured-focused comparison, guided by five interrelated dimensions drawn from the theoretical framework and contemporary political economy literature:

Surveillance regimes: Differentiating between state-led and corporate-led data governance, including algorithmic control, biometric surveillance, and speech moderation (Zuboff, 2019; Greitens, 2020).

Populist or authoritarian discourse: The degree to which ruling elites adopt anti-pluralist, anti-elite, or nationalist rhetoric to justify political centralization (Mounk, 2018; Levitsky & Ziblatt, 2018).

Regulatory architecture: The capacity, coherence, and rights-based nature of legal responses to technological monopolies and digital threats (Floridi, 2020; Stix, 2021).

Market concentration and corporate dominance: The relative influence of transnational tech corporations or state-linked conglomerates in shaping public and economic life (Ferguson, Jorgensen, & Chen, 2021).

Distributional effects: Gini coefficients, wealth inequality ratios, and the degree of institutional mechanisms aimed at redistribution (Piketty, 2020; World Inequality Database, 2023).

In addition to academic literature and think tank reports (e.g., CFR, Brookings, Oxford Analytica), our comparative analysis utilizes data from legal and policy documents (e.g., US Executive Order 14110; EU’s AI Act and DMA; China’s Algorithm Regulation Guidelines), global indices (Freedom House, World Inequality Database, OECD, UNDP), and institutional and corporate sources (e.g., BEA, Eurostat, Statista). Each case study incorporates recent quantitative indicators (e.g., Gini coefficients, market share, surveillance systems), legal developments, and political narratives drawn from authoritative sources.

Each case is structured around a narrative analysis that traces how exogenous shocks (e.g., the 2008 financial crisis, 2016 US election, COVID-19 pandemic, AI breakthroughs) interact with domestic institutions and elite strategies to produce new governance forms. Within each case, the analysis identifies:

Critical junctures: Moments of institutional recalibration or constitutional strain.

Policy implementations: Not merely announcements but enacted legal or regulatory shifts.

Techno-political strategies: How state or corporate actors deploy technologies to shape political narratives or policy enforcement.

Indicators of democratic erosion or authoritarian learning: Decline in civil liberties, executive expansion, or weakened rule of law.

By applying this analytical framework across all three polities, the study identifies a comparative pattern of functional convergence, wherein both democratic and authoritarian regimes exhibit hybrid features that prioritize surveillance, elite preservation, and controlled pluralism—often under the guise of security, efficiency, or the “people’s will.”

 3.2. Case Selection Criteria and Expected Contribution

Of the three cases, the US represents an archetypal liberal democracy undergoing internal democratic erosion and corporate capture. It exhibits the tension between electoral legitimacy and structural plutocracy, making it a compelling case to test Polanyi’s “hollowing-out” thesis (Polanyi, 1944). Similarly, the EU, as a normative regulatory superpower with a multilateral legal architecture, offers an alternative path that resists full convergence. Yet, it is increasingly vulnerable to populist pressure and foreign techno-authoritarian influence, particularly through Chinese investments and ideological infiltration in Eastern Europe (Rühlig, 2021). It provides a litmus test for liberal resilience amid systemic stress. China embodies the opposite end of the spectrum of regimes. Yet its market mechanisms, AI experimentation, and export of digital authoritarianism reveal a capitalist modernization project fully aligned with centralized political control. This case is central to Braudelian analysis and to the concept of “state capitalism 2.0” (Meagher & Huang, 2021).

This empirical framework contributes to ongoing debates in comparative politics, political economy, and global governance in several ways:

First, it challenges teleological models of democratic transition (e.g., Lipset, Fukuyama) by showing how liberal democracies may regress or hybridize. 

Second, it provides a counterweight to regime typologies that presume dichotomies between democratic and authoritarian governance.

Third, it offers an integrated lens for analyzing digital capitalism not only as an economic phenomenon but also as a core driver of institutional transformation and regime legitimacy.

Ultimately, the structured-focused comparison developed here highlights how varying institutional architectures, cultural narratives, and economic configurations converge under global capitalist pressures to produce overlapping governance logics—blurring the distinction between democracy and authoritarianism in the 21st century.

3.3. Case Studies

In this section, we first provide an overarching background on the recent economic and political transformations in the US, the EU, and China. Each subsequent subsection presents the main proxy variables developed to test our reverse convergence hypothesis. The analysis draws on quantitative data from these three cases and qualitatively examines the five analytical dimensions specified in the structured-focused comparison framework. The case studies illustrate how systemic vulnerabilities have facilitated democratic backsliding and the erosion of liberal norms. A synthesis of the findings is presented in Table 1 following the completion of the three-country analyses.

 3.3.1. United States: Populism, Polarization, and Democratic Backsliding

 The US shows how a mature liberal democracy can weaken from within due to socio-economic inequality, political polarization, and institutional complacency. Once celebrated as a global example of liberal values—including free elections, independent media, and constitutional checks—the US has, since the 2008 financial crisis, become more vulnerable democratically. Economic disruption, falling trust in institutions, and elite-led governance have driven populist movements and democratic decline.

The 2008 crisis marked a crucial turning point. It devastated middle- and working-class communities, revealed the close link between government and Wall Street, and discredited bipartisan economic orthodoxy. The public's disillusionment fueled movements like Occupy Wall Street and the Tea Party, both of which pushed back against elite unaccountability. The heavy-handed suppression of the Occupy protests, including mass arrests and surveillance, raised concerns about authoritarian tendencies in a self-proclaimed democracy—drawing comparisons, though on a different scale, to crackdowns in regimes like China (Freedom House, 2021).

That process, which propelled authoritarian right-wing populist Donald Trump’s rise in politics from 2015 onward, marked a new stage. His campaign openly adopted anti-elite, nationalist, and anti-pluralist rhetoric. As president (first term: 2017–2021, second term: 2025-), Trump challenged liberal norms, weakened judicial and media independence, and increased executive power. His refusal to accept the 2020 election results—culminating in the January 6 Capitol insurrection—represented a breakdown of peaceful democratic transition. Despite losing the election, Trumpism stayed strong, with 60% of Republican voters still believing in a stolen election (Pew Research Center, 2022). 

The diagnosis that “Trump has gone but Trumpism survives” proved true. Experts like Mounk (2018) and Levitsky and Ziblatt (2018) argue that this ideological hold makes Trump’s political comeback possible, especially amid dissatisfaction with Biden-era reforms. Although the Biden administration (2021–2025) passed major laws like the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, it failed to carry out broader structural reforms. Attempts to pass voting rights protections, antitrust laws, and wealth redistribution were blocked by Senate gridlock and institutional veto points. Corporate profits topped $2.5 trillion in 2022 (BEA, 2023), and the top 10% of Americans owned over 70% of the wealth (World Inequality Database, 2023). These disparities increased alienation, setting the stage for Trump’s 2024 return.

Upon returning to office in 2025, Trump’s authoritarian tendencies intensified. His allies conducted civil service purges and undermined the judiciary (Project 2025, 2024). He renewed his attacks on the Federal Reserve, academic institutions like Harvard and the University of California (UC), and scientific agencies such as the National Institutes of Health (NIH), National Science Foundation (NSF), and Centers for Disease Control and Prevention (CDC)—calling them parts of a “deep state.”

Since reclaiming office in 2025, Trump has rolled back US commitments to multilateral institutions and international agreements, withdrawing from the Paris Climate Agreement for a second time, dismantling domestic climate policies, and cutting US involvement in United Nations climate efforts (Executive Order 14162, 2025; The Verge, 2025). He led a renewed US withdrawal from the World Health Organization (WHO) and froze funding (Executive Order 14155, 2025; Foreign Policy of the Second Donald Trump Administration, 2025), while at the World Trade Organization (WTO), his administration suspended contributions, promoted “reciprocal tariff” policies, and further challenged rule-based trade norms (Bruegel, 2025; Fortune, 2025). Relations with the World Bank (WB) and International Monetary Fund (IMF) shifted toward conditional engagement rather than total withdrawal, with the US demanding major reforms, a narrower focus on core economic goals, and less emphasis on climate, gender, and social issues (Bessent, 2025; Politico, 2025; Washington Post, 2025). These actions collectively reveal a broader strategy to weaken multilateral governance frameworks in favor of bilateral leverage, economic nationalism, and reassertion of US sovereignty over international regulatory and policy commitments.

Since early 2025, President Trump has accelerated the use of tariffs as an economic tool. On February 1, 2025, he signed executive orders imposing 25% tariffs on imports from Canada and Mexico (excluding Canadian energy, which was set at 10%), and 10% tariffs on all Chinese imports (White House, 2025). By April, he expanded this with a global tariff system, applying across-the-board tariffs—including 25% on autos and auto parts—while exempting goods compliant with USMCA (HK Law, 2025). In July, he increased tariffs on Canada from 25% to 35%, citing national security concerns related to drug trafficking (White House, 2025). In August, he issued “reciprocal tariffs” from 10% to 41% on imports from multiple countries (Al Jazeera, 2025) and introduced more targeted measures including a 100% tariff on imported semiconductors (Investopedia, 2025), 50% tariffs on copper and Brazilian goods (Reuters, 2025), and 50% tariffs on Indian imports amid geopolitical tensions (India Times, 2025). These actions signaled a rejection of liberal economic principles, leading to weakened institutions, suppressed dissent, and reduced democratic pluralism.

Surveillance Regimes: The US exemplifies a hybrid model of surveillance governance, where private tech companies play a leading role in data collection and algorithmic management. Firms such as Meta (Facebook), Google, and Amazon operate extensive surveillance networks based on user profiling, behavioral targeting, and algorithmic content amplification (Zuboff, 2019). Although state agencies like the NSA and FBI maintain substantial surveillance capabilities—especially after the passage of the Patriot Act—the real influence stems from the close cooperation between public institutions and corporate data monopolies. During the Trump and Biden administrations, concerns about biometric surveillance (e.g., facial recognition by law enforcement) and algorithmic bias have grown stronger (ACLU, 2021; EFF, 2023).

Populist or Authoritarian Discourse: Trump’s rhetoric, both as president and candidate, exemplifies a classic populist narrative: anti-elite, anti-media, and nationalist in tone. His messaging systematically portrayed democratic institutions as corrupt and illegitimate. Slogans like “Drain the Swamp” and “Fake News” served as delegitimizing tools targeting courts, media, and public health agencies. Even after leaving office, Trump’s claims that the 2020 election was “stolen” sustained an anti-pluralist narrative embraced by large segments of the Republican base (Pew Research Center, 2022). This discursive strategy created a political climate hostile to institutional checks and minority rights, a hallmark of authoritarian populism (Mounk, 2018; Levitsky & Ziblatt, 2018).

Regulatory Architecture: Despite bipartisan calls to rein in Big Tech, the US has failed to create a coherent digital regulatory framework. Antitrust actions against Meta, Amazon, and Google have been slow and fragmented across various agencies, including the FTC and DOJ. Unlike the EU’s Digital Markets Act (DMA), there is no comprehensive law in place to protect data privacy or ensure algorithmic transparency. Executive Order 14110 (2023) on AI governance prioritized innovation over rights-based protections, reflecting the US tendency to favor market freedom over systemic safeguards (White House, 2023).

Market Concentration and Corporate Dominance: The US economy has become increasingly dominated by mega-corporations in the tech, finance, and pharmaceutical industries. Corporate profits topped $2.5 trillion in 2022, and the wealth of US billionaires grew by $1.7 trillion between 2020 and 2023 (BEA, 2023; Americans for Tax Fairness, 2023). This concentration of economic power results in disproportionate political influence, ranging from lobbying efforts to media ownership. Despite widespread support for reforms, legislative gridlock—driven by corporate campaign financing—has prevented the implementation of meaningful antitrust or wealth redistribution policies (Ferguson, Jorgensen, & Chen, 2021).

In addition to other empirical indicators, the alliance between President Trump and prominent capitalist entrepreneurs—most notably Elon Musk (owner of X, Space X, Tesla), Mark Zuckerberg (Meta/Facebook), Bill Gates (Microsoft), and Larry Page and Sergey Brin (Alphabet/Google)—exemplifies the deepening entanglement between corporate power and state authority. Their collaboration, spanning electoral support and financial interdependencies, and culminating in Musk’s controversial appointment as Director of The Department of Government Efficiency (DOGE), reflects a broader pattern of elite convergence in shaping state agendas. Musk’s privileged access to classified government information, his extraction of public rents through a politically mediated symbiosis, and his relative insulation from regulatory oversight demonstrate how corporate actors increasingly instrumentalize the state apparatus for private gain. The eventual rupture of this alliance—marked by public confrontation and institutional fallout—further underscores the volatile and transactional nature of elite-driven governance, wherein state capacity is progressively subordinated to private influence and corporate interests.

 Distributional Effects: Income inequality in the US remains among the highest in the OECD. According to the World Inequality Database, the top 10% of Americans hold approximately 71% of total wealth, while the bottom 50% own less than 2% (World Inequality Database, 2025). In comparison, the top 10% in the EU hold about 59% of total wealth (World Inequality Database, 2025). The US Gini coefficient was 0.418 in 2023, significantly higher than that of most other advanced democracies (World Bank, 2025). Moreover, the top 1% of Americans now control nearly 35% of total national wealth—more than double their share in 1980—illustrating the persistence and deepening of wealth concentration despite measures such as the Gini index often understating inequality at the top (Financial Times, 2025, 17 January).

Social mobility has also decreased, with access to education and healthcare closely linked to income and geography. The Biden administration tried to redistribute wealth through the American Rescue Plan and infrastructure investments, but structural mechanisms—such as progressive taxation, housing reform, and union protections—remained weak or politically unfeasible. Taken together, these dynamics reveal a systemic convergence toward illiberal governance. While democratic institutions remain formally intact, they are increasingly undermined by executive overreach, unregulated corporate power, populist rhetoric, and economic polarization. The US thus exemplifies a form of “reverse convergence,” where liberal democracy increasingly adopts tools, narratives, and institutional patterns once associated with hybrid or authoritarian regimes.          

In sum, the US exemplifies democratic (reverse) convergence, retaining formal democratic structures while adopting substantive features of backsliding regimes. Key freedoms and institutions persist, but they are increasingly compromised. Executive overreach has politicized regulatory bodies, the normalization of political violence, and the erosion of institutional trust signal a hybrid trajectory. Once a beacon of liberal governance, the US now faces internal challenges resembling those in newer democracies.

 3.3.2. European Union: Technocratic Stability Amid Democratic Strains

Although long regarded as a stronghold of liberal constitutionalism, the EU now faces challenges to its institutional resilience from internal divisions and external authoritarian pressures; it is also dealing with rising illiberal populism across both Western and Eastern Europe (Mudde & Rovira Kaltwasser, 2017). Recent electoral victories by far-right parties in countries such as Italy and Austria, in absolute terms, and partly in France, the Netherlands, and Germany, demonstrate the normalization of nationalist discourse within key EU democracies

In the 2024 European Parliament elections, parties promoting Euroscepticism, cultural nationalism, and anti-immigration policies gained momentum. The Netherlands’ PVV, France’s RN, and Germany’s AfD surged in polls, reflecting widespread disaffection with centrist parties. In Belgium and Italy, regionalist and far-right parties advanced authoritarian and populist agendas. Meanwhile, Hungary and Poland entrenched illiberal practices such as media capture and judicial manipulation (Krastev & Holmes, 2019).

Importantly, Eastern Europe has become both a site and a vector of democratic erosion. Hungary’s alliance with China, mainly for economic reasons as well as to balance some European approaches, has facilitated the diffusion of surveillance infrastructure and educational partnerships—such as the proposed Fudan University campus in Budapest—that export elements of China’s governance model (Rühlig, 2021). The Belt and Road Initiative (BRI) has deepened Sino-EU ties, particularly in infrastructure and digital sectors. This fosters a “reverse convergence” dynamic, where illiberal norms radiate from semi-authoritarian EU members and are augmented by China’s external influence.

Despite its technocratic strengths—such as the General Data Protection Regulation (GDPR), the Digital Markets Act (DMA), the Digital Services Act (DSA), and AI Act—the EU has struggled to enforce democratic standards within its bloc. Fiscal policies have not significantly reduced inequality. Programs like NextGenerationEU stabilized economies post-COVID-19 but failed to address deep structural divides between North-South and East-West Europe (Matthijs & McNamara, 2015). Eurostat (2023) data show persistent inequality across member states.

Like the case of the US, the following section summarizes the proxy variables we developed to measure our "reverse convergence hypothesis."

Surveillance Regimes: Although the EU traditionally emphasizes privacy and digital rights, recent shifts indicate increasing ambiguity in its data governance approach. On one side, GDPR remains a global standard for rights-based digital regulation. On the other side, rising investments in biometric databases (e.g., EURODAC and Entry/Exit System) and predictive policing tools show a tilt toward state-led surveillance, especially in response to migration and terrorism (European Commission, 2023; Véliz, 2021). Additionally, corporate surveillance by US-based platforms such as Meta and Google continues largely unchecked within European markets, despite the implementation of DMA and DSA. These contradictions highlight the EU's dual role as both a regulator and facilitator of digital control (Floridi, 2020).

Populist or Authoritarian Discourse: The erosion of liberal norms across the EU is marked by the increasing prevalence of authoritarian populist rhetoric. Leaders in Hungary, Poland (prior to 2023), and Slovakia have employed nationalist, anti-immigrant, and anti-EU narratives to centralize power and delegitimize opposition (Krastev & Holmes, 2019). In Western Europe, parties such as the RN (France), AfD (Germany), and PVV (Netherlands) similarly weaponize cultural grievances and civilizational discourse to justify illiberal agendas (Mudde & Rovira Kaltwasser, 2017). Such rhetoric often targets media independence, judicial checks, and multiculturalism—exploiting identity-based fears to undermine pluralism.

Regulatory Architecture: The EU’s regulatory framework remains more robust and institutionalized than the US’s, bolstered by supranational jurisprudence via the European Court of Justice. Yet its capacity to rein in digital monopolies and safeguard democratic norms remains uneven. While instruments like the AI Act and Digital Markets Act (DMA) embody a more proactive digital governance model, enforcement continues to be hindered by national divergences, regulatory complexity, and political fragmentation. For instance, Apple and Meta were found in breach of DMA provisions in April 2025, and the Commission launched the first formal review of the DMA in July (European Commission, 2025; Truth on the Market, 2025). Under the new AI Act regime, core obligations became applicable to general-purpose AI models as of August 2, 2025, though full enforcement is deferred until 2026 onward (Digital Strategy EU, 2025; Eversheds-Sutherland, 2025). On democratic backsliding, while the Article 7(1) procedure against Poland was closed in 2024, the one against Hungary remains stalled despite reports of systemic rule-of-law erosion (Consilium, 2025; Jean-Monnet Saar, 2025). Meanwhile, the Rule of Law Conditionality Regulation has been deployed sparingly—suspending EU funds to Hungary and Poland in 2022—but its impact has been limited by political pushback and procedural ambiguity (CER, 2025; European Parliament, 2025).

Market Concentration and Corporate Dominance: Although the EU has enhanced its ability to regulate corporate dominance through antitrust enforcement and new digital regulations, major U.S. tech firms remain highly influential, underscoring the enduring limits of EU digital sovereignty. In April 2025, the European Commission imposed €500 million and €200 million fines on Apple and Meta, respectively, for violations of the Digital Markets Act (DMA), signaling a robust, albeit cautious, approach to curbing platform power (Digital Markets Act Roundup, 2025; EU fines Apple and Meta, 2025). Yet, Meta is contesting its designation under the DMA, challenging Brussels’ authority at the EU General Court (Meta challenges, 2025). Moreover, the Commission has decided not to require Big Tech firms to pay for the cost of monitoring its digital rules, despite calls for such supervision fees (DMA supervisory fee, 2025).

Beyond the tech sector, European conglomerates in finance, pharmaceuticals, and energy maintain oligopolistic advantages, often hindered less by regulation than by entrenched procurement and subsidy systems—structures that, even when justified on technocratic grounds like resilience or innovation, often reinforce existing hierarchies rather than dismantle them (Public Procurement Reform, 2025).

Distributional Effects: Persistent inequality and wealth concentration continue to erode democratic cohesion within the EU. While social safety nets remain comparatively stronger than in the US, disparities between and within member states have deepened. In 2024, the EU-wide Gini coefficient stood at 0.297, but values remained significantly higher in countries such as Italy (0.327), Spain (0.330), and Germany (0.314) (Eurostat, 2025a). Wealth inequality is starker: the top 10% of households in the euro area hold over 60% of net wealth, while the bottom 50% account for less than 4% (European Central Bank, 2024). Real wage growth has stagnated in several major economies since 2019, and in 2025, youth unemployment rates exceeded 27% in Spain, 22% in Greece, and 20% in Italy, exacerbating generational divides (Eurostat, 2025b). Housing affordability has also deteriorated, with median house prices in the euro area rising by 48% between 2010 and 2024 and rent burdens surpassing 40% of disposable income for low-income households in more than half of EU capitals (Eurostat, 2025c).

Piketty (2020) has argued that the EU’s failure to establish a genuine fiscal union capable of meaningful redistribution has allowed economic nationalism to displace solidarity. This distributional gap feeds into populist narratives portraying Brussels as an enabler of elite privilege rather than a guarantor of equitable prosperity. Cross-cutting dynamics further complicate this picture: the 2008 financial crisis, the refugee crisis, the COVID-19 pandemic, and the war in Ukraine have exposed structural weaknesses in EU governance. Instruments such as NextGenerationEU have provided temporary cohesion, but persistent North–South and East–West divides—particularly visible in budgetary negotiations and migration policy—reflect the broader tension between technocratic governance and democratic responsiveness.

Simultaneously, Chinese influence in Eastern Europe through the BRI and newer partnerships—such as with Fudan University, Confucius Institutes, and digital infrastructure investments—demonstrates how foreign techno-authoritarian models penetrate EU territory, reinforcing “reverse convergence” dynamics (Rühlig, 2021). In summary, the EU remains a hybrid entity: a normative regulatory power within a multilevel governance framework, yet increasingly susceptible to internal illiberal drift and external authoritarian diffusion. Its legal and technocratic strengths provide partial protection, but without addressing structural inequality, surveillance ambiguity, and populist pressures, the EU’s liberal democratic project will stay fragile.

 3.3.3. China: Authoritarian Resilience and Global Assertiveness

China exemplifies the other pole of governance convergence: an authoritarian regime that integrates capitalist tools and exports a techno-political model. Under Xi Jinping (since 2012), the Chinese Communist Party (CCP) has increasingly centralized power, institutionalized surveillance, and promoted a nationalist-populist narrative that contrasts Chinese stability with Western dysfunction.

Domestically, China deploys AI-driven surveillance, biometric tracking, and a Social Credit System to enforce ideological conformity (Creemers, 2018). These tools create a high-tech authoritarian state where dissent is minimal and public behavior is continuously monitored. Internationally, China promotes its model via the BRI and the Digital Silk Road (DSR). As documented by Öztürk (2025), through its sharp power politics, Beijing encourages illiberal governance abroad by exporting digital infrastructure and surveillance systems to countries in Asia, Africa, and Eastern Europe (CSIS, 2022).

On the economic front, despite slowing growth, the CCP maintains legitimacy through nationalist rhetoric and selective redistributive campaigns. Xi’s “common prosperity” agenda promotes social equality but often serves as a means of political signaling rather than substantive reform (Economist Intelligence Unit, 2022). China’s approach fuses technocratic efficiency with personalist control, blending state capitalism with ideological rigidity.

The following section summarizes the proxy variables we developed to measure our "reverse convergence hypothesis."

Surveillance Regimes: China’s governance model relies on a sophisticated surveillance system that combines state-led and corporate-led data management. It uses AI-powered facial recognition, biometric tracking, algorithmic profiling, and extensive speech moderation on platforms like WeChat and Weibo. The Social Credit System, which integrates financial, behavioral, and political data, acts as a behavioral control tool that encourages ideological conformity and obedience (Creemers, 2018; Dai, 2020). The Ministry of Public Security is reportedly responsible for over 500 million CCTV cameras nationwide (Statista, 2023). These efforts exemplify “digital Leninism”—a form of algorithmic authoritarianism where datafication is used to uphold state control (Greitens, 2020). Unlike in liberal democracies, where data governance involves various stakeholders in debate, in China, these systems are mainly controlled by the state and lack judicial oversight (Freedom House, 2023).

Populist or Authoritarian Discourse: Ideologically, the CCP has adopted a form of anti-pluralist nationalism to strengthen its monopoly. Xi Jinping’s consolidation of power—shown by the removal of presidential term limits in 2018—was accompanied by the elevation of “Xi Jinping Thought” into the Party’s constitutional framework. CCP propaganda increasingly portrays Western liberalism as morally corrupt and incompatible with China’s “civilizational uniqueness.” Foreign policy rhetoric has taken on a populist tone, with concepts like the “community of common destiny,” which frames itself as rejecting Western dominance and supporting multipolar sovereignty (Öztürk, 2025; Callahan, 2016). This populist-authoritarian blend is also reflected in “wolf warrior diplomacy,” where Chinese officials portray global criticism as foreign attempts to hinder China’s rightful rise (Rolland, 2020).

Regulatory Architecture: In recent years, China has developed a regulatory system aimed at controlling big tech, but within a framework that emphasizes political stability over individual rights. The Cyberspace Administration of China (CAC) has introduced comprehensive data laws, including the 2021 Personal Information Protection Law and the 2021 Data Security Law, but their enforcement remains opaque and politically influenced (Xia, 2022). Algorithmic regulation was formalized through the 2022 Internet Information Service Algorithmic Recommendation Management Provisions, requiring alignment with “core socialist values” (China Law Translate, 2022). These rules do not provide rights-based protections but instead serve to maintain ideological control over tech platforms, ensuring they operate as extensions of Party oversight. Regulatory milestones are often sudden, such as the crackdown on Ant Group’s IPO or the forced restructuring of Didi and other tech companies (Oxford Analytica, 2023).

Market Concentration and Corporate Dominance: China’s economy is heavily concentrated in state-connected conglomerates and politically embedded tech giants like Alibaba, Tencent, and Huawei. These firms lead in e-commerce, fintech, AI, and digital infrastructure; however, their independence depends on loyalty to the Party. As Meagher and Huang (2021) note, China’s corporate system demonstrates a “symbiotic state-capital alliance,” where capital accumulation supports regime stability. The government’s selective actions—such as anti-monopoly campaigns or forced divestments—are meant to regulate capital without hindering strategic innovation. Globally, these companies have expanded China’s digital influence, especially through Huawei’s 5G deployment and ByteDance’s TikTok, attracting scrutiny from democratic countries over national security and market fairness (CSIS, 2022).

Although operating on a completely different scale and under different political circumstances, the forced departure of Alibaba founder Jack Ma from China—similar in some ways to the conflict between Musk and Trump in the United States—serves as a revealing example of the asymmetrical power balance between capital and politics in China. Jack Ma, Alibaba's founder, faced intense political and regulatory pressure after a speech he delivered in October 2020, where he criticized China’s financial regulatory system. Soon after, the planned IPO of Ant Group, Alibaba’s fintech affiliate, was abruptly halted by Chinese authorities. Following this crackdown, Jack Ma disappeared from public view for several months, sparking international speculation. Even though he has returned, Ma has largely stayed out of China’s business scene and no longer holds controlling stakes in Alibaba’s main entities, marking a significant retreat from his previous prominence as a public and entrepreneurial figure. This episode highlights the unbalanced and fragile relationship between capital and state power in China, contrasting sharply with the dynamics seen in liberal capitalist democracies.

Distributional Effects: Despite decades of growth, inequality in China remains high. The Gini coefficient peaked at 0.49 in the mid-2010s and stayed around 0.47 in 2023—higher than the OECD averages (World Inequality Database, 2023). Urban-rural divides, regional gaps, and elite control of financial assets worsen wealth concentration. Xi Jinping’s “common prosperity” campaign, launched in 2021, aimed to tackle this issue through philanthropic pressure on tech billionaires and fiscal redistribution; however, the results have been inconsistent and mostly symbolic (Economist Intelligence Unit, 2022). Education, healthcare, and housing remain key areas of inequality, especially for migrant populations without urban hukou (resident permit) status. Additionally, social protection systems are fragmented and underfunded, which limits the government’s ability to counter systemic precarity (UNDP, 2023).

 Regarding functional convergence through divergence, China’s case shows a merging of state-led digital capitalism with authoritarian consolidation. It combines populist-nationalist rhetoric with a techno-political regime that is gaining influence globally. Through the BRI and the DSR, China is spreading its standards, surveillance infrastructure, and governance model to the Global South—and parts of Eastern Europe—raising the normative boundary between liberal and illiberal orders. Additionally, as Western democracies increasingly adopt elements of China’s regulatory and surveillance systems—under the guise of digital sovereignty or strategic autonomy—a functional convergence occurs. This does not mean regime homogenization but indicates a shared focus on stability, elite continuity, and controlled pluralism over traditional liberal openness.

4. A Normative Discussion of the Case for Reverse Convergence

As summarized in Table 2, in the US, surveillance capitalism is led by corporations (e.g., Google, Meta, Amazon), with weak federal data protections and fragmented enforcement (e.g., DOJ v. Google). Populist mobilization is clear in the lasting impact of Trumpism and platform-based political messaging (for example, Elon Musk’s rebranding of Twitter as X). Economic inequality remains high, with the top 1% owning over 34% of the wealth; institutional capture and regulatory gaps persist in AI oversight.

Globally, this trajectory has undermined the credibility of American democratic advocacy. Authoritarian regimes, particularly China, have leveraged US dysfunction to justify their models. Chinese state media contrasted the Capitol riot with CCP-led stability, framing Western democracy as inherently unstable. This narrative reversal illustrates an ideological convergence from both ends: while the US adopts tactics common in authoritarian states, regimes like China cite these developments to validate their legitimacy. The convergence is thus not merely structural but symbolic—blurring the once-clear divide between liberal and illiberal orders.

On the other hand, the EU leads in setting standards for digital governance with the AI Act and Digital Markets Act (DMA). Notable enforcement actions include the €500 million fine on Apple. It maintains restrictions on biometric surveillance and algorithmic scoring, differentiating itself from US corporate laissez-faire and China’s coercive tech model. Despite the strength of its institutions, populist right-wing movements have gained momentum, especially in Hungary, Italy, and parts of Western Europe, amid ongoing regional inequalities.

Finally, in China, the government has implemented centralized algorithmic regulation, social credit scoring, and export-focused digital infrastructure through the Digital Silk Road (DSR). Political legitimacy increasingly relies on the cooperation of elite tech actors and the party-state, amid growing economic challenges and nationalist narratives. AI governance requires algorithm registration, real-name authentication, and content censorship—illustrating “authoritarian adaptability” to the digital age.

Source: Author.

5. Conclusion

Liberal democracies and authoritarian regimes—once considered ideological opposites—are increasingly converging in both governance practices and political outcomes. This article explores this convergence through a political economy lens, arguing that the root cause lies in the structural crises of unregulated corporate capitalism. The erosion of inclusive prosperity, widening inequality, and the failure of liberal elites to respond effectively to these developments have fueled populist backlashes worldwide.

Rather than catalyzing democratic renewal, these pressures have often facilitated an authoritarian drift. Power has been recentralized—sometimes overtly through constitutional changes and repression, other times covertly through economic manipulation and surveillance. Meanwhile, authoritarian regimes—most prominently China—have effectively harnessed capitalist tools to consolidate state power, challenging the long-standing assumption that liberalism is a prerequisite for economic development.

Drawing on Polanyi’s notion of the “double movement,” we interpret the rise of populism as a protective response to the dislocations caused by market fundamentalism. However, echoing the interwar period of the 1930s, these movements often degenerate into authoritarianism. Braudel’s distinction between market economies and hierarchical capitalism helps explain why contemporary capitalism tends to facilitate oligarchic concentration—a structure more compatible with authoritarian governance than with democratic pluralism. In this context, laissez-faire models have hollowed out democratic institutions from within.

The United States illustrates this erosion most clearly: the resilience of Trumpism and the pervasive influence of corporate lobbies reveal deep structural vulnerabilities. Conversely, China’s confident projection of authoritarian capitalism—and its ability to exploit Western disunity—signals the arrival of an alternative governance model.

We identify five converging trends that characterize this transformation:

Populist Authoritarianism: Leaders in both democratic and authoritarian systems claim to represent “the people” while centralizing power and weakening institutional checks.

Surveillance Capitalism: Both corporations and liberal states have adopted data-driven tools of social control once associated primarily with authoritarian regimes.

Oligarchic Governance: Across regime types, economic elites wield outsized influence, undermining accountability and distorting policy outcomes.

Norm Erosion and Strategic Mimicry: As liberal norms decay, autocracies co-opt liberal language (e.g., "transparency," "rule of law") to legitimize repression and discredit opposition.

Global Governance Vacuum: The retreat of the liberal international order has weakened global support for democracy and human rights, allowing illiberal actors to expand their influence.

This convergence does not imply moral or functional equivalence between regime types. Rather, it suggests a shared trajectory: one that privileges control, identity politics, and elite coordination over pluralism, civic freedoms, and democratic accountability. Whether this is a temporary deviation or the beginning of a lasting systemic realignment depends on the capacity of liberal democracies to implement far-reaching reforms.

It is crucially important to understand that the current crisis is not merely ideological or geopolitical—it is structural, endogenous, and global. The most serious threat to the postwar liberal order lies in the submission of democratic institutions to transnational capital. As citizens feel increasingly disenfranchised, many are drawn to reactionary, illiberal alternatives that promise meaning, belonging, and moral clarity in the face of perceived liberal decadence.

 Policy Recommendations

To reverse the authoritarian drift and reclaim democratic legitimacy, liberal regimes must:

Reduce Inequality: Through progressive taxation, universal public services, and social protections that rebuild the middle class.

Curb Corporate Power: Enforce antitrust regulations and break up monopolies to restore market competition and limit oligarchic control.

Revitalize Democratic Institutions: Reform political finance, strengthen checks and balances, and enhance civic participation.

Promote Digital Sovereignty: Regulate data ownership, algorithmic governance, and surveillance practices to protect individual rights in the digital age.

Reframe National Identity: Cultivate inclusive forms of nationalism rooted in shared civic values, not exclusionary ethno-populism.

 Rebuild Global Governance: Pursue international cooperation—potentially through a new Bretton Woods-style framework—to realign capital, environment, and democracy on a more equitable basis.

As a restrictive challenge to the fulfillment of all these tasks, unlike the post-World War II order, today’s multipolar world lacks a unifying hegemon with the strategic capacity and legitimacy to lead a global reconstruction. What is emerging instead is a hybrid and fragmented landscape where populism and digital authoritarianism fill the void left by weakened liberal institutions.

Understanding this structural convergence is the first step toward interrupting it. Without bold, systemic transformation, liberal democracies risk assimilation into a global illiberal capitalist consensus—one where the language of freedom endures, but its substance is steadily eroded.

 (*) Dr. Ibrahim Ozturk is Professor of Economics at Duisburg-Essen University, Institute of East Asian Studies (IN-EAST), Duisburg, Germany, and senior economic researcher at the European Center for Populism Studies (ECPS), Brussels, Belgium. Email: iozturk@populismstudies.org