rlp
Less equal societies may become less democratic
BACK in 1992, in his book "The End Of History and the Last Man", Francis
Fukuyama argued that liberal democracy had triumphed. The return of
authoritarianism in Russia, and the growing power of absolutist China, has
undermined the argument at the geopolitical level. And events in recent years
have caused questions on the ability of liberal democracy to flourish in some
countries where it seemed established. The new nationalists that have emerged
in Turkey, Poland and Hungary tend to regard disagreement with their policies
as unpatriotic and are quick to brand opponents as being in the pay of foreign
powers.
What used to be called "the Whig theory of history" saw civilisation steadily
moving in a more open, liberal direction. In the late 19th century and early
20th centuries, countries became more democratic, first allowing most men and
then women to vote. There were setbacks in the 1920s and 1930s with the
emergence of fascism and, of course, the imposition of communism in eastern
Europe and China after the Second World War.
But in a broad swathe of the world - North America, western Europe, Australasia
and Japan - democracy seemed well established. And that democracy was
accompanied by the growth of welfare states, higher taxes on the wealthy and a
general decline in inequality. The period from the 1940s to the 1980s was known
as the "Great Compression". The collapse of the Soviet Union in 1989-1991
brought a range of new countries into the sphere; Latin America also moved in a
democratic direction.
But all was not completely well, as I outlined in a 2013 book "The Last Vote".
The respect held by voters for politicians fell sharply; turnout (and party
membership) also dropped. People became both cynical and complacent about
democracy. Cynical in the sense that they felt politicians were all the same;
complacent in that they did not really fear the loss of their rights. The
financial crisis that began in 2007 has, by creating an additional degree of
voter dissatisfaction, further undermined democracy.
If we go back to the growth of democracy in 19th century Britain, one can see
the gradual extension of the franchise through the reform acts; broadly
speaking to the middle classes in 1832, to the better-off urban workers in
1867; agricultural workers in 1884; and to all other men (and women over 30) in
1918. As those classes joined the electorate, parties tailored their policies
to appeal to them. Education for children after 1870, for example and old age
pensions in 1909. The emergence of the welfare state and managed economies
after 1945 arose from the demands of working-class voters and were also seen by
the better-off as a price worth paying for avoiding either fascism or
communism.
In that sense, then, it might seem as if economic power followed political
power; once given the vote, ordinary people backed policies that would
redistribute income in their favour. But what if the sequence of events was
reversed? The economic power of the middle classes helped get them the vote in
1832; the power of industrial workers, though strike action, earned them the
vote later on; the mass mobilisation of women in the First World War turned
into female suffrage. Citizens demanded the political status to match their
economic power.
By the same extension, then, we could see the rise of inequality since 1980s
and the threats to democracy as two sides of the same coin. The wealthy used
their economic power to fund politicians and bend the legislative agenda in
their interest; the decline of manufacturing industry and trade unions in the
west weakened the economic power of workers. The wealthy are more likely to
vote and far more likely to have their voice heard. In his book "Unequal
Democracy", Larry Bartels compared the voting patterns of US senators with the
view of their voters, by income. He found that the views of those in the upper
third of the income distribution received 50% more weight than those in the
middle third. The view of those in the bottom third received no weight at all.
Senators did not meet these people socially, or at fund-raisers.
The potential feedback process is clear. The rich back politicians, allowing
the latter to pass policies that favour the wealthy, giving them more money for
political funding. The poorest voters are appeased with nods to cultural
issues, as Thomas Frank argued in "What's the Matter with Kansas?". The rise of
populism will not redress the balance; Donald Trump's cabinet, packed with
billionaires, is pushing for a tax-cutting package that will mainly help the
rich. The main economic impact of Brexit so far has been a squeeze on real
wages thanks to a fall in the pound.
Admittedly, the immigration issue does not fit easily into this template.
Business owners tend to favour liberal immigration rules so they can attract
the best workers. Still, note that those on the right may favour restrictions
on movement of people but not on the movement of their capital.
Perhaps we are not heading to the totalitarian nightmare pictured in George
Orwell's "1984". But we could be moving close to the Roman model, under which
in theory the system allowed for expression of the popular will, but in
practice, rule by the rich occurred. The masses were kept happy with "bread and
circuses"; the modern equivalent being junk food and reality TV shows.