The Separation Between Economic and Political Power

The legitimacy of the modern state depends on whether political power can serve public capacity, rather than being captured by capital or privilege.

The quality of governance in a modern state depends, to a large extent, on whether it can establish a stable boundary between economic power and political power. The two forms of power cannot be completely separated, because the modern economy itself is embedded in law, taxation, currency, finance, land, infrastructure, education, scientific research, industrial policy, and national security systems. The real danger emerges when one form of power crosses the boundary and turns the other into its instrument. The highest legitimacy of the state power machine lies not in how many resources it controls, but in how much of its power it can convert into public capacity.

This essay is part of the State Governance and Capacity Series.

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Executive Summary

• The core question of the modern state is whether political power and economic power can maintain clear boundaries. When capital purchases politics, publicness is destroyed; when politics swallows the market, efficiency, vitality, and civic space are weakened.

• China’s experience from 1949 to 1978 shows the deep costs of political power arbitrarily controlling the market and society. That period rebuilt state capacity and an industrial foundation, but it also exposed the efficiency losses, weakened incentives, and restricted personal choice that emerge when administrative command replaces economic laws.

• America’s success from 1945 to the 1980s shows that capitalism works best when capital is politically disciplined. Antitrust policy, the New Deal legacy, Social Security, unions, interstate highways, housing finance, and public investment jointly shaped America’s middle class and postwar prosperity.

• After the 1980s, American neoliberalism broke the balance in which politics constrained capital. Financialization, deregulation, weakened unions, relaxed antitrust enforcement, manufacturing offshoring, and shareholder-value maximization increasingly redirected the American state machine toward capital.

• Bernie Sanders’s critique of American oligarchization provides contemporary evidence. Super PACs, billionaire campaign spending, AI, cryptocurrency, AIPAC, and other special-interest groups are turning wealth into candidate selection, agenda setting, and policy influence.

• China’s current, relatively better configuration comes from vigilance against both extremes. China has absorbed the historical lesson that politics cannot arbitrarily dominate the market, while also observing the American risk of capital purchasing politics. This has produced a dynamic arrangement in which politics retains ultimate authority of constraint, the market preserves its efficiency function, and capital retains space for wealth creation.

• The legitimacy of the modern state ultimately depends on whether the state power machine can convert power into public capacity. The state must be able to constrain capital and constrain itself; power cannot serve capital or privilege, but must serve improved lives, social mobility, public trust, and long-term national capacity.

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1. The Core Question of the Modern State Is How the Power Machine Preserves Its Public Character

The quality of governance in a modern state depends, to a large extent, on whether it can establish a stable boundary between economic power and political power. Capital needs profit, competition, innovation, and room for expansion. Political power needs order, direction, public investment, and long-term organizational capacity. The two forms of power cannot be completely separated, because the modern economy itself is embedded in law, taxation, currency, finance, land, infrastructure, education, scientific research, industrial policy, and national security systems. The real danger emerges when one form of power crosses the boundary and turns the other into its instrument.

When capital purchases politics, publicness is destroyed; when politics swallows the market, efficiency, vitality, and civic space are weakened. This is the most basic dual risk of the modern state. If a country allows wealth to continuously enter the state machine through political donations, lobbying, revolving doors, media networks, think-tank funding, judicial influence, and regulatory capture, elections and procedures may still exist, but public policy will gradually be redirected by private capital. If another country allows political power to arbitrarily control enterprises, prices, markets, employment, migration, resource allocation, and personal life, the state machine will gain powerful mobilizational capacity, but the economic system will lose price signals, competitive selection, enterprise autonomy, and social creativity.

How economic power and political power maintain boundaries appears, on the surface, to be a question about the relationship between capital and the state. At a deeper level, it is a question of the self-restraint of the state power machine. The state is not an abstract flag or slogan. It is an entire apparatus of power: fiscal capacity, taxation, finance, the judiciary, administration, regulation, land, the military, police, cadre systems, local governments, state-owned enterprises, public services, and industrial policy. It can build infrastructure, organize industrialization, maintain order, and provide public goods. It can also create rents, protect privileges, suppress competition, and consume social vitality.

The highest legitimacy of the state power machine lies not in how many resources it controls, but in how much of its power it can convert into public capacity.

This public capacity includes national unity, social order, economic development, technological progress, infrastructure, educational opportunity, medical security, employment mobility, regional balance, crisis governance, and improvement in ordinary people’s lives. If political power cannot continuously prove this, it will degenerate from public power into ruling power. If capital refuses to recognize this, it will transform itself from a creator of wealth into a predator of public order.

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2. China from 1949 to 1978: The Capacity and Cost of Political Power’s Comprehensive Control over Economy and Society

China’s historical experience from 1949 to 1978 is an unavoidable starting point for understanding the institutional configuration of China today. After 1949, the Communist Party of China rebuilt a country that had long been fragmented, impoverished, divided, and deeply penetrated by external forces. This period completed institutional integration after national unification, established a basic industrial system, a defense-industrial base, grassroots organizational systems, basic education, and public health networks. It also created a state power machine capable of reaching into the grassroots, mobilizing resources, and organizing society. These achievements cannot be lightly dismissed.

Yet this period also left profound institutional lessons. After political power became highly centralized, capital, markets, prices, employment, grain, land, enterprises, investment, migration, and individual life opportunities were all absorbed into a highly administrative system of allocation. Enterprises became, to a large extent, units executing planned tasks. Localities became nodes within a system of targets and mobilization. Individuals were deeply embedded into the organizational system through household registration, work units, ration coupons, personnel files, and administrative identity. The state machine could concentrate resources to complete certain major objectives, but for a long time it also suppressed market efficiency, enterprise initiative, individual choice, and social creativity.

Political power can organize the starting point of modernization, but political power cannot arbitrarily replace economic laws.

Once the price mechanism fails, resource allocation can no longer accurately reflect scarcity and changes in demand. Once competitive mechanisms are absent, enterprises lack pressure to continuously improve products, reduce costs, and serve consumers. Once individual incentives weaken, labor effort, innovation, and entrepreneurial impulses are all suppressed. Once the space for social rights narrows, human mobility, expression, transaction, career choice, and self-development are all cut apart by administrative boundaries.

This historical period shows that strong mobilizational capacity in the state power machine does not automatically mean high-quality governance capacity. Mobilization can concentrate resources. Governance must also understand economic laws, respect social vitality, protect people’s basic room for choice, and allow the market to perform price discovery and efficiency selection across a large number of concrete economic activities. A country can organize resources through political power, but it cannot rely indefinitely on administrative commands to replace social creativity.

The historical significance of reform and opening up begins here. the Communist Party of China did not suddenly accept the market in abstract theory, nor did it hand the state over to capital. It came to recognize through long practice that if political power compresses the whole of society into administrative command, modernization cannot continuously release vitality. The state must retain direction, but it cannot occupy all space. Politics must maintain order, but it cannot replace the entire economic process. Public power must serve development, and it must also leave room for markets, enterprises, and individuals to grow.

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3. The Deeper Meaning of Reform and Opening Up Was the State Power Machine Redrawing Its Own Boundaries

Reform and opening up is often described as marketization, external opening, and the growth of the private economy. At a deeper level, however, it was a major adjustment in the operating mode of the state power machine itself. The state did not withdraw from the economy, nor did it give up political leadership. What changed was the way it used economic resources: from comprehensive administrative command to the release, under political leadership, of productive space for markets, enterprises, localities, farmers, foreign capital, private business, and individual incentives.

The household responsibility system released farmers’ labor incentives. Township and village enterprises released local and grassroots industrialization energy. Special economic zones opened windows to the outside world. Price reform allowed supply and demand relations to gradually enter the process of resource allocation. Private enterprises and foreign-funded firms brought competition, technology, management, and market discipline. The Chinese state machine still controlled direction, order, and key resources, but a large number of concrete economic activities began to be driven by market mechanisms, enterprise judgment, and individual choice.

The deepest institutional meaning of reform and opening up was that the state power machine recognized that it could not replace all social creativity.

This recognition did not weaken China’s state capacity. It reshaped China’s state capacity. The state no longer pursued development solely through administrative mobilization. It began to expand its fiscal base, industrial scale, technological diffusion, export capacity, urbanization, and household income through market mechanisms. The market was no longer merely a force outside state power. It was incorporated into the national development system.

This is also the historical origin of China’s institutional configuration today. China did not accept the logic that capital should dominate politics, nor did it return to the old structure in which politics could arbitrarily dominate the market. It formed a more complex dynamic arrangement: political power retains ultimate directional authority and the power to maintain order; market mechanisms undertake efficiency selection and price discovery; capital is allowed to create wealth and participate in accumulation; the state organizes long-term capacity in key areas and corrects deviations when capital crosses boundaries, finance becomes unbalanced, platforms turn monopolistic, real estate bubbles inflate, or local debt expands.

This arrangement has not eliminated all problems. Local governments can turn industrial policy into investment-attraction races and debt expansion. Administrative approvals can become channels for rent-seeking. State-owned enterprises, platforms, financial capital, real estate capital, and local interests can also form closed networks. The long-term challenge of China’s governance lies precisely in whether political power can continuously prove that it will not slide back into the old model of arbitrarily controlling the market and society. The advantage of China’s current configuration comes from the fact that capital has not gained dominance over politics; its long-term test lies in whether political power can continuously restrain itself.

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4. America’s Success from 1945 to the 1980s Came from Political Power’s Constraint over Capital Power

The historical experience of America’s postwar prosperity also deserves serious attention. Mid-20th-century America was not a simple victory of laissez-faire capitalism. The reason it was able to build a powerful middle class, a leading industrial system, a broad consumer market, and stable political legitimacy was precisely that political power effectively constrained capital power for a considerable period of time.

Antitrust policy limited excessive concentration of capital. The legacy of the New Deal expanded the federal government’s capacity to regulate the economy and protect labor. Social Security reduced household risk. Unions increased workers’ bargaining power. Progressive taxation limited excessive wealth concentration. Interstate highways and public infrastructure expanded the national market. The housing finance system helped large numbers of families accumulate assets. Public education, research funding, and the defense technology system supported America’s long-term technological advantage.

The most successful phase of American capitalism was not the phase in which capital was least constrained, but the phase in which political power could embed capital within nation-building, labor income, middle-class expansion, and public investment.

This was the core of the postwar American order. Capital was certainly powerful. Firms certainly pursued profits. Wall Street always existed. But the state machine still retained public direction in many key areas: limiting monopoly, protecting labor, investing in infrastructure, expanding education, supporting research, building the housing system, and maintaining a middle-class social structure.

This arrangement created powerful legitimacy for the United States. Ordinary workers believed that hard work could bring stable income. Families believed that housing and education could bring upward mobility. Enterprises believed that the national market and public infrastructure could support long-term expansion. Society believed that the state machine served not only capital, but also workers, families, regions, and future generations. The deeper strength of the postwar American order lay in the relatively stable structural balance once formed among politics, capital, labor, and public investment.

This historical experience is especially ironic for today’s America. Neoliberalism, later packaged as an American tradition, was not the real foundation of America’s postwar prosperity. America’s powerful industrial system, middle class, and global competitiveness did not come from capital being completely free. They came from a state that still had the capacity to constrain capital, organize public investment, and expand social mobility. America once succeeded because politics could discipline capital; America’s crisis today comes, to a significant extent, from capital disciplining politics.

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5. After the 1980s, the American State Machine Was Gradually Redirected by Capital

Beginning in the 1980s, the postwar balance between American politics and capital was gradually broken. Tax cuts, deregulation, financial liberalization, weakened unions, relaxed antitrust enforcement, shareholder value maximization, manufacturing offshoring, and capital-market-driven corporate governance jointly changed the relationship between the American state machine and capital. Capital was no longer primarily embedded in a system of production, labor, middle-class expansion, and public investment. It increasingly reshaped national direction through finance, technology, healthcare, real estate, defense, and platform monopoly.

Financialization changed corporate governance. Firms increasingly served stock prices, buybacks, mergers and acquisitions, leverage, and short-term capital returns, while physical investment, worker training, supply-chain resilience, and long-term manufacturing capacity were compressed. The weakening of unions changed the bargaining position of workers, weakening the link between wage growth and productivity growth. Manufacturing offshoring changed local communities and the industrial base, causing many regions to lose stable employment, tax bases, and social structures. Rising healthcare, education, and housing costs pushed ordinary households back into a condition of deep uncertainty.

The political system also underwent deep changes. Political donations, super PACs, the lobbying industry, revolving doors, think-tank funding, media networks, university donations, industry regulatory capture, and the judicial system jointly created legalized channels for economic power to enter the state machine. America’s problem does not always appear as naked corruption. The deeper problem is that many channels through which capital influences politics have been institutionalized, legalized, professionalized, and normalized.

After 2010, judicial rulings further worsened this configuration.

• Citizens United v. FEC brought independent political expenditures by corporations and unions under First Amendment protection, opening the path for larger-scale corporate money to enter electoral politics.

• In the same year, SpeechNow.org v. FEC further removed limits on individual contributions to political committees that engage only in independent expenditures, laying the legal foundation for the expansion of super PACs.

• By McCutcheon v. FEC, the Supreme Court had also eliminated aggregate limits on how much an individual could contribute over a two-year cycle to all candidates, parties, and political committees combined.

• Later, Americans for Prosperity Foundation v. Bonta further strengthened donor anonymity and associational privacy protections, reducing transparency around nonprofit organizations and political influence networks.

• FEC v. Ted Cruz for Senate then struck down limits on candidates using post-election contributions to repay personal campaign loans, further loosening the boundary between candidates’ personal financial interests and campaign fundraising.

The common direction of these rulings was to increasingly interpret political money as political speech, and to increasingly treat restrictions on capital’s entry into the electoral process as restrictions on free speech. As a result, money did not simply corrode politics from the outside. Under the combined force of constitutional interpretation, judicial precedent, and campaign finance institutions, it gained a formal channel into the political system.

Capital’s influence over politics was no longer merely a matter of money-for-power transactions; it became an institutionalized power protected by law, executed by professional organizations, and amplified through media advertising and political machinery.

This mechanism also explains why American oligarchization does not require the cancellation of elections. Candidates still compete. Voters still vote. Congress still operates. But candidate selection, agenda setting, advertising, grassroots mobilization, think-tank priorities, and regulatory boundaries are increasingly susceptible to being shaped in advance by large sums of money.

When the judicial system continuously incorporates political spending into the framework of free-speech protection, capital’s entry into the state machine is no longer merely a political-economic reality. It becomes a structural arrangement inside the American constitutional order.

In a recent article titled “Are we still a democracy?”, Bernie Sanders put the problem very directly. He argued that America’s oligarchization is no longer only about wealth concentration, income inequality, or billionaire control of media. It is about “very wealthy people and their super PACs buying the political system and undermining the foundations of American democracy.” The numbers he listed are striking:

• In the 2024 election, Elon Musk spent at least $290 million supporting Trump;

• The 100 wealthiest people in America spent a combined $2.6 billion supporting their preferred candidates;

• Heading into the 2026 midterm elections, super PACs tied to AI, cryptocurrency, AIPAC, and other special-interest groups may spend billions of dollars influencing Senate and House races.

Sanders’s conclusion is sharp: ordinary citizens have only one vote, while oligarchs can buy candidates; this is not democracy, but the American government becoming a wholly owned subsidiary of the billionaire class.

The significance of this judgment does not lie in Sanders’s use of the word “oligarchy.” It lies in his identification of the specific mechanism through which capital penetrates the American state machine. Billionaires do not need to abolish elections or cancel the Constitution. They only need to convert wealth continuously into political access through super PACs, political advertising, campaign money, candidate selection, agenda setting, and policy lobbying. America still has ballot boxes, but candidates, agendas, media narratives, and legislative priorities are increasingly pre-shaped by capital.

America is not without state capacity; its state capacity is increasingly being redirected by private capital.

Defense capital shapes the defense budget. Financial capital shapes taxation and regulation. Healthcare capital shapes drug pricing and the healthcare system. Tech giants shape data governance, antitrust policy, and AI regulation. Real estate capital shapes housing supply and local politics. Today, AI capital, crypto capital, and pro-Israel lobbying networks also reveal a common trend with increasing clarity: future technology rules, financial rules, and foreign policy will not be formed only through public debate. They will also be formed through capitalized political machinery.

The legitimacy of the postwar American order came from middle-class expansion. The crisis of the neoliberal American order also comes from the middle class being squeezed again by financialization, deindustrialization, asset inflation, and rising public costs. When ordinary people discover that work no longer guarantees a decent life, education no longer reliably brings upward mobility, housing is no longer the entrance to middle-class asset accumulation, healthcare no longer provides certainty, and politics no longer responds to the pressures of majority life, populism is not merely an emotional problem. It is the political echo of the erosion of the public character of the state machine.

Sanders’s question, “Are we still a democracy?”, can be more accurately placed within a state-capacity framework. America certainly still retains democratic procedures, but procedure itself is becoming increasingly unable to prevent capital from entering the state machine. When capital can buy candidates, pre-set agendas, influence media, shape regulation, and reward compliant politicians, democracy does not disappear overnight. It gradually degenerates from a mechanism of public decision-making into the political shell of capital competition.

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6. Capital Does Not Grow Out of a Vacuum

Great capital is never an isolated personal myth. It grows out of state order, legal systems, infrastructure, education systems, labor supply, financial markets, technological accumulation, public security, supply-chain networks, and the opportunities of an era. Without stable currency, property-rights protection, transport networks, energy systems, university research, trained workers, public health, judicial enforcement, and market scale, capital cannot create so-called miracles by itself.

There is no era of billionaires; there are only billionaires of an era.

The sharpness of this sentence lies in the way it places capital back inside history and institutions. The formation of great wealth always depends on the public conditions of a given era. Capital may have returns. It may pursue profit. It may reward risk-taking and innovation. But it cannot take the opportunities provided by public order and turn them back into the power to buy the state, dominate society, and suppress workers.

Digital capital makes this problem even sharper. Traditional industrial capital controls factories, equipment, supply chains, and products. Digital platform capital also controls entry points, data, payments, credit, attention, algorithms, social relations, merchant traffic, and forms of labor organization. Once a large platform controls user access, transaction rules, information distribution, and data structures, it is no longer just an ordinary enterprise. In several fields, it has acquired quasi-public power. Traditional monopoly may take decades to form. Platform monopoly can complete its social embedding within a few years.

State regulation of capital does not mean hostility to the market. Mature state regulation means preventing private capital from privatizing quasi-public power. The closer capital comes to financial infrastructure, data infrastructure, narrative infrastructure, life-service entry points, and employment organization platforms, the more it must accept public rules. If a country waits until capital has fully controlled foundational entry points before regulating it, it will no longer be facing enterprises. It will be facing a privatized social power machine.

This is also the deeper logic behind China’s recent platform governance, antitrust enforcement, real-estate deleveraging, financial regulation, and common prosperity agenda. These policies may certainly create friction and cost in implementation, but the core issue is not simply the growth speed of enterprises. It is whether capital is accumulating a form of social dominance beyond normal market competition.

Capital can create wealth, but it cannot purchase the state; capital can organize enterprises, but it cannot turn social life into its private territory.

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7. China’s Current, Relatively Better Configuration Comes from Vigilance Against Two Historical Extremes

China’s institutional configuration today cannot be simply understood as a strong state and a weak market, nor as the suppression of capital. More accurately, China has formed a dynamic balance between two historical reference points.

One reference point comes from China itself. The experience from 1949 to 1978 shows that if political power arbitrarily controls markets, enterprises, capital, and personal life, it may gain powerful mobilizational capacity, but it will also pay a price in efficiency, incentives, vitality, and civic space. This lesson led China after reform and opening up to gradually recognize that market mechanisms, enterprise autonomy, individual incentives, local competition, and external opening are indispensable to modernization.

The other reference point comes from the United States. America from 1945 to the 1980s shows that the most successful phase of capitalism is often the phase in which political power can constrain capital, build public goods, expand the middle class, and protect labor. America after the 1980s shows that once capital continuously enters the state machine through legalized mechanisms, public policy increasingly serves financialization, monopolization, and asset-owner interests. Political procedures may still exist, but the public character of the state is continuously hollowed out.

China’s current advantage comes from simultaneous vigilance against these two extremes: politics cannot be purchased by capital, and the market cannot be arbitrarily swallowed by politics.

The way this configuration operates is that political power retains ultimate authority of constraint, market mechanisms retain the function of efficiency selection, capital retains space for wealth creation, and the state organizes long-term capacity through industrial policy, the financial system, infrastructure, education, science and technology, and local competition. At the same time, through anti-corruption, regulation, antitrust enforcement, real-estate deleveraging, and local debt constraints, it prevents capital and local power from forming closed interest networks.

This configuration is not perfect. It must continuously handle policy stability, enterprise expectations, local incentives, private-sector confidence, property-rights protection, regulatory boundaries, and the space for social rights. Once political power possesses ultimate authority of constraint, it must more clearly prove that this constraint serves public capacity, rather than departmental interests, local interests, administrative privilege, or short-term campaign-style governance. Capital cannot stand above the state, but state power must also avoid pressing capital vitality and social creativity back under administrative domination.

The key to China’s long-term institutional competitiveness is not whether the state can control capital. Control itself is not scarce. Many countries can control capital in crude ways. The truly scarce capacity is much more difficult:

The state can constrain capital without suffocating capital, organize the market without replacing the market, set direction without crushing social vitality, and maintain political leadership without turning public power into privileged resources.

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8. Political Legitimacy Comes from Whether Power Can Be Converted into Public Capacity

The sources of legitimacy in modern states are undergoing profound change. The United States emphasizes elections, the Constitution, procedure, and individual freedom. But when economic power continuously penetrates the political system, procedural legitimacy is eroded by the structure of wealth. China emphasizes development, order, national unity, social stability, industrialization, and national rejuvenation. But when political power holds enormous organizational capacity, it must also continuously provide growth, mobility, fairness, civic space, public services, and long-term security. No country can maintain legitimacy through institutional narratives alone. Legitimacy ultimately returns to whether people can obtain certainty, upward mobility, dignity, and a future within that system.

Procedure cannot replace results, and results cannot eliminate boundaries. America’s problem is that procedure is increasingly easy for capital to penetrate. China’s challenge is that results must be continuously secured through institutional discipline and boundaries on power. One country may possess electoral procedures while allowing public decision-making to be redirected by capital networks. Another may possess powerful mobilizational capacity while still needing to prevent political power from compressing markets, society, and personal space again. The two risks take different forms, but both point to the same underlying question: whether the state machine can still preserve its public character.

China’s historical experience makes it difficult for the country to accept an order in which capital dominates politics. Since the modern era, national fragmentation, external intrusion, warlordism, comprador capital, bureaucratic capital, and social disorder have formed the Communist Party of China ’s deep vigilance toward the relationship between capital and politics. The history of 1949 to 1978 also taught China that highly concentrated political control over economy and society can bring severe costs. After reform and opening up, China’s gradually formed governance structure has been an attempt to search for a dynamic boundary between these two kinds of historical experience.

America’s historical experience is equally clear. Postwar American prosperity proves that capitalism requires political constraint, public investment, labor bargaining, and middle-class expansion in order to acquire broad legitimacy. America’s neoliberal turn proves that when capital re-enters the state machine and rewrites public policy, society experiences widening inequality, deindustrialization, community decline, rising populism, and declining governance capacity. America’s problem today is not that it lacks a free market. It is that the most powerful capital inside the market can increasingly shape politics itself.

The truly difficult task of the modern state is to make the state power machine capable of constraining capital and constraining itself at the same time.

When capital purchases the state, publicness is destroyed. When politics swallows the market, efficiency, vitality, and civic space are weakened. If state power is used to accumulate private wealth, departmental interests, local rents, or administrative privilege, it loses legitimacy. If state power can organize capital, release the market, protect labor, expand the middle class, build public goods, preserve social mobility, and drive long-term capacity formation, it can convert power into public capacity.

Ultimately, the boundary between economic power and political power is not only a matter of institutional design. It is a matter of national destiny. Capital needs to be allowed to create wealth, but wealth cannot purchase the state. Politics needs to be able to organize capital, but power cannot arbitrarily dominate society. Markets need efficiency. The state needs direction. Society needs rights. People need upward mobility. The maturity of a modern state is not reflected in which force it overwhelms, but in whether it can place capital, markets, politics, and society inside a sustainable public order.

The legitimacy of the state power machine comes from its ability to continuously prove that power does not exist for power itself, capital does not exist for capital itself, and the final reason for the state’s existence is to convert organizational capacity into improved human life, social mobility, public trust, and long-term national capacity.

Sanders’s critique of American oligarchization also shows that procedural legitimacy alone is insufficient to protect democracy. Ordinary citizens have one person, one vote, but billionaires can continuously amplify their political weight through super PACs, political advertising, think tanks, media, industry organizations, and campaign finance. Voting still exists. Congress still convenes. Courts still operate. Media still debates. But the actual object to which the state machine responds has changed. When wealth can systematically purchase political access, democracy preserves its form while losing its public character.

This is where the historical experiences of America and China illuminate each other. China’s lesson from 1949 to 1978 is that if political power arbitrarily controls markets, enterprises, and personal life, it weakens efficiency, vitality, and civic space. America’s lesson after the 1980s is that if capital power enters the state machine through legalized mechanisms, it weakens public decision-making, the middle-class foundation, and political legitimacy. One country’s problem came from political power excessively dominating society. The other country’s problem came from economic power excessively dominating politics. The paths are different, but both demonstrate the same fact: the legitimacy of the modern state depends on whether the state power machine can preserve its public character.