‘The Capitalism of Good’: When the West becomes a victim of its own virtue

Among analytical resources covering contemporary Russia, Re:Russia occupies a distinctive and important place. At a time when much commentary on Russia oscillates between ideological certainty and emotional reaction, Re:Russia has consistently provided substantive analysis grounded in data, historical context and serious engagement with political and economic developments. Even when one disagrees with particular arguments or conclusions, the platform remains one of the more informative and intellectually serious sources for understanding developments in Russia and the broader post-Soviet space.

It is for this reason that Vladislav Inozemtsev’s recent opinion piece, “The Capitalism of Good and Evil,” deserves close attention. Not because it offers another defence of Western capitalism, but because it reflects a broader intellectual tendency that has become increasingly visible in recent years: the attempt to explain the crisis of the Western model not through its own internal contradictions, but through the disruptive rise of allegedly inferior or “unfair” non-Western alternatives.

Inozemtsev’s argument is striking in both its ambition and moral clarity. Western capitalism is portrayed not merely as economically successful, but as fundamentally distinct in ethical and institutional terms: a system based on rules, self-restraint, and universal principles. Its contemporary difficulties, including its visible rightward turn, are explained less as products of inequality, financialisation, democratic fatigue or the social consequences of neoliberal globalisation, and more as reluctant adaptations to a harsher international environment shaped by authoritarian and predatory competitors.

The underlying message is difficult to miss: the West is not failing. Rather, it is being forced to compromise to survive in a world increasingly dominated by actors unwilling to play by civilised rules.

At first glance, this interpretation may appear persuasive. Yet upon closer inspection, it reveals a profound contradiction at the heart of contemporary liberal self-understanding. For what is being defended is not simply Western capitalism, but a particular moral narrative about capitalism — one in which the West becomes less an architect of the global order than its tragic victim.

The curious innocence of Western capitalism

At the heart of Inozemtsev’s essay lies a strikingly moral distinction between two forms of capitalism. On one side stands the West: lawful, restrained, institutionally mature, governed by rules and universal principles. On the other stand its challengers, above all China and various non-Western systems, portrayed as opportunistic, state-driven, predatory and unwilling to play by the norms that allegedly underpin global prosperity.

The explanatory logic is clear. The crisis of the contemporary world economy is not understood as the outcome of contradictions internal to capitalism, but rather as the consequence of competition with inferior forms of capitalism. The West, according to this interpretation, is reluctantly abandoning some of its liberal principles only because it finds itself confronted by actors unconstrained by the norms that once sustained a fair and open international order.

The imagery behind this argument is not entirely new. One is reminded of former EU foreign policy chief Josep Borrell’s infamous comparison of Europe to “a garden” surrounded by a “jungle,” warning that “the jungle could invade the garden.” The metaphor was widely criticised for its colonial undertones, yet it reflected a similar intuition: that the West represents a uniquely civilised space whose difficulties arise not from its own contradictions, but from the encroachment of a harsher and less rule-bound outside world. Inozemtsev’s argument translates this geopolitical imagery into the language of political economy. Western capitalism appears almost too principled, too restrained, for the brutal competitive realities of the contemporary world.

Yet this argument rests on a remarkable historical and theoretical omission.

Many of the practices now criticised in non-Western capitalism are hardly foreign to the historical experience of Western development. State subsidies, industrial protectionism, strategic control over technology, managed trade and active state support for national capital were not invented in Beijing. They were central to the rise of Britain, Germany, Japan, South Korea and the United States. As Friedrich List argued long ago, and Ha-Joon Chang more recently documented, today’s advanced economies often “kicked away the ladder,” advocating free markets only after industrial supremacy had already been secured.

But even this observation only scratches the surface of the problem.

The deeper issue is that Inozemtsev’s narrative largely bypasses an entire tradition of political economy concerned precisely with how global capitalism developed through asymmetrical relations between the centre and the periphery. From dependency theorists such as Andre Gunder Frank and Samir Amin to world-systems scholars such as Immanuel Wallerstein, and more recent empirical work on unequal exchange by Jason Hickel and co-authors, a central argument has been that the prosperity of advanced capitalist countries cannot be understood separately from the structural subordination of others. (I have discussed this tradition elsewhere in relation to the contemporary relevance of dependency theory.)

In this tradition, underdevelopment is not the absence of development. It is a product of development itself.

The West did not simply become wealthy through better institutions, stronger norms or greater commitment to rules. Colonial extraction, unequal terms of trade, financial dependency, debt regimes, technological monopolies and global labour arbitrage played central roles in shaping the hierarchy of the capitalist world economy. To paraphrase a longstanding dependency argument, the development of the centre has historically been intertwined with the underdevelopment of the periphery.

Seen from this perspective, contemporary globalisation appears in a rather different light.

Branko Milanović’s The Great Global Transformation helps clarify what Inozemtsev’s framework obscures: the West is not merely defending universal rules against unfair outsiders, but reacting to a world its own corporations and institutions helped create. The rise of China and other emerging economies occurred through Western-led globalisation, as corporations outsourced production, fragmented supply chains and integrated lower-cost economies into global production. The search for profit, not civilisational generosity, shifted industrial capacity eastward. Core capitalism is now confronting the consequences of its own success.

In Empire of the Periphery, Kagarlitsky shows that peripheral capitalism should not be understood as an imperfect local imitation of a civilised Western norm, but as a structurally dependent form of capitalism shaped by its position in the world-system. The “savage” features of peripheral capitalism (which Inozemtsev decries) are therefore not accidental leftovers of backwardness. They are often the very conditions through which the capitalist centre extracts value from the periphery.

Cheap labour abroad was not an unfortunate side effect of globalisation. It was one of its central economic rationales.

In this sense, the article performs an analytical inversion. Rather than viewing current tensions as contradictions generated by neoliberal globalisation, it portrays them as an external disruption of an otherwise functional order. Western capitalism appears less as the architect of globalisation than as its reluctant victim.

Yet the institutions often celebrated as hallmarks of Western success, trade openness, capital mobility and global production integration, were also the mechanisms through which Western capital accumulated extraordinary profits while enabling the rise of new competitors. China and other challengers emerged not despite globalisation, but because globalisation, under Western leadership, made their rise profitable.

The deeper issue, then, is whether today’s tensions reflect a conflict between “good” and “bad” capitalism, or a crisis of capitalist hegemony itself. Marxist political economy has long emphasised that capitalism expands not through universal rules equally applied, but through unevenness, dependency, coercion and selective openness. The rules were never politically neutral. They reflected prevailing structures of power.

Seen in this light, Inozemtsev’s moral contrast between virtuous Western capitalism and predatory non-Western alternatives appears less as an explanation of the present than as a nostalgic reinterpretation of a world order whose asymmetries are becoming harder to sustain.

In this respect, the essay belongs to a broader genre of attempts to rescue capitalism by distinguishing between its virtuous and corrupted forms, an intellectual tendency visible, in different ways, in authors such as Paul Collier and Martin Wolf (whom I have discussed elsewhere). The problem, in these accounts, is rarely capitalism itself, but capitalism gone astray.

Yet the “good capitalism” being defended often resembles less a historical reality than an idealised memory of an exceptional postwar moment, sustained not only by domestic social compromise, but by geopolitical dominance and an unequal global order. The question, therefore, is not whether the West can recover a purer capitalism, but whether the conditions that once made such a model viable still exist.

Saving the West, but from what?

The most revealing part of Inozemtsev’s essay lies in its conclusion.

After portraying Western capitalism as threatened by more predatory and less rule-bound competitors, the article ends with a call for the West to preserve the principles that made it successful — but only insofar as these principles do not place it at a disadvantage relative to its rivals.

This is where the argument begins to unravel.

Are the principles of Western capitalism universal or are they instruments of geopolitical advantage?

If they are universal, they must remain binding even when competitors benefit from them. Free trade, legal predictability, openness, and multilateral norms cannot be celebrated as civilisational virtues only when they reinforce Western dominance, but be quietly revised once others begin using them successfully. Universalism starts looking suspiciously conditional when its strongest defenders lose their competitive edge.

This contradiction becomes particularly visible in the language of the so-called “rules-based international order.” If the rules can be bent, suspended or selectively interpreted whenever strategic interests demand it, one is entitled to ask: whose order is it and whose interests do these rules ultimately serve? An order in which universality is contingent on geopolitical convenience risks appearing less rules-based than hierarchy-based.

Yet if the goal is strategic competition rather than universalism, then the recommendations point toward something quite different from the liberal model being nostalgically defended: protectionism, industrial policy, technological containment, capital restrictions and geopolitical fragmentation. In other words, the West may increasingly need to abandon some of the very practices said to define its moral superiority to preserve its global position.

The “good capitalism” being defended often resembles less a historical reality than an idealised memory of an exceptional postwar moment, sustained not only by domestic compromise but by geopolitical dominance and an unequal international order. Once these conditions weaken, appeals to restore the West’s original principles begin to look less like a strategy for renewal than a nostalgic attempt to preserve hierarchy under the language of universalism.