Demise of liberal democracy

Anis Chowdhury | Published: 00:00, Sep 20,2019 | Updated: 00:32, Sep 20,2019


DEMOCRACY is in recede all over the world — in developed and developing countries, including former communist countries — dashing the hope of those who triumphantly declared ‘the end of history’ or confidently answered ‘liberal democracy’ to the question ‘who should rule and why?’ in the wake of the fall of the Berlin Wall. Those who saw the advent of the ‘third wave of democracy’, too, should be dismayed to see liberal democracy’s regress in countries where it seems to have deep roots.

How can one explain such a development in less than three decades of the collapse of the communist states in former Soviet Union and Eastern Europe? What would the thinkers who rationalised the rise of ‘illiberal’ democracy in developing or traditional societies as the long absence of democratic values say when it is happening in the United States and parts of Europe, including the United Kingdom?


Trump, Brexit and the rise of the far right

THE rise of Donal Trump, Brexit and far-right political parties in Europe is generally seen as the result of several factors, such as heightened economic insecurity amidst faltering recovery from the worst the financial crisis of 2008–2009 since the Great Depression of the 1930s; rising inequality and concentration of wealth among few; and sudden arrival of large number of migrants with different colour, race and faith.

However, these do not seem to tell much about a root cause. If economic uncertainty or hardship were a deeper factor, then why did liberal democracy become stronger in the wake of the 1930s Great Depression? Thus, while these may be an immediate trigger for liberal democracy’s slide, one needs to search for a more fundamental cause.


Structural faultline

ABOUT three decades before influential thinkers were jubilant or thrilled about the final victory of liberal democracy, a Canadian political scientist, avowed socialist and professor at the University of Toronto, Crawford Macpherson, had discovered a structural faultline. He believed that liberal democracy was a contradiction in terms; classical British liberals were hardly democrats.

Classical British liberals, such as Thomas Hobbes, James Harrington and John Locke had argued for the rights of the ‘individual’. But they had a narrow view of who should be considered a rights-bearing individual. The critical factor was property. They counted a person as an individual who had command over himself and his possessions, including human ones (ie, salves).

For all his inspiring words about government created by and responsive to ‘the people’, John Locke was an investor in the slave trade. He was not comfortable to include the unemployed and dispossessed poor into his definition of citizens. In fact, that these people were not, or by right, full members of political society was the prevailing view in England in the second half of the seventeenth century, as pointed out by Macpherson.

But classical British liberals had to respond to growing populations of working people or proletariat with their own, often democratic, ideas after the rise of industrial capitalism. They struggled to reconcile their assumptions about free-standing propertied individuals with the democratic demands of the exploited and excluded. While defending both the rights of workers to unionise and of factory owners to fire them, they invariably sided with the owners.

However, a softer, gentler liberalism gained ground since the end of World War II and lasted until the late 1970s. The privileges of propertied individuals were preserved through a compromise: social security (or, unemployment benefits for those fired), public education, housing and health to be paid by taxes, mainly on the rich.

This bargain got unstuck with the ascendancy of neoliberal economic thinkers since the early 1980s.



OUTRAGED by infringements on capital, a resolute cadre of conservative intellectuals was determined to dismantle welfare programmes, seen as socialism and cut taxes, seen as unfair disincentive to wealth creation. They promoted the market as near-infallible, and viewed the state as problem not solution.

Neoliberals got ascendancy with the elections of Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States. Their extreme anti-state ideas filled the intellectual vacuum of Thatcher and Reagan, especially in the context of a cold war.

Thus, since the early 1980s fiscal austerity through welfare cuts became an orthodoxy in macroeconomic policy arena. Deregulation, privatisation and liberalisation became a norm to roll back the state. Reductions in corporate and personal income tax rates became an instrument to benefit the rich or the capitalist class, portrayed as ‘wealth creators’ with the subtext, workers are ‘spoilers’.

As unions were smashed, the share of wages in national income continued to decline while the gap between workers’ wages and executive salaries widens extraordinarily. Between 1978 and 2018, the average pay of the bosses of the largest 350 companies in the US grew by 1,007.5 per cent, adjusted for inflation, according to the Economics Policy Institute’s latest survey and the CEOs of Britain’s biggest companies earned in one day (January 9, 2019) what it takes an average worker to make in a year, according to an article published by the BBC.

It is not just in the United States and the United Kingdom where this obnoxious trend is happening. As, the neoliberalism took hold, the phenomenon spread all over the world. In India, the world’s largest democracy and a jewel in the crown for liberal democracy in developing countries, it takes even less time. An average Indian CEO earns more in about a third of a day (0.35) than his average worker would in 365 days.

When workers have been struggling to meet ends with declining or stagnant wages (adjusted for inflation), liberated from effective prudential regulation, financial institutions developed chains of indebtedness on behalf of the super rich. On the other hand, the super rich continued to become richer, benefiting from tax cuts, which encourage executive salary rises despite being outrageously high. Unconventional monetary policy since the 2008–2009 global financial crisis is also aiding their wealth accumulation through speculative activities.

In theory, workers can have freedom to choose their boss, but cannot choose not to work, especially when the welfare system has been dismantled. More fundamentally, as Macpherson pointed out, the workers need money but cannot barter; therefore, they are coerced into the monetary system. For the exchange to be truly voluntary ‘the proviso that is needed is whether to enter into any exchange at all.’


Capitalism incongruent with freedom

ACCORDING to Macpherson, capitalism is discordant with freedom. Classical liberals saw freedom as an absence of constraints, or in the words of Macpherson’s contemporary, Milton Friedman, ‘freedom of choice’. But following Hagel, Macpherson viewed freedom as the freedom to develop one’s fullest human potential, or ‘capabilities’ in Amartya Sen’s words. Thus, for Macpherson freedom is ‘positive’, whereas it is a ‘negative’ conception in the classical liberals’ view.

According to classical British liberals, an individual (almost always male) was the sole proprietor of his (or her) skills — results of their innate talent or merit for which they owe nothing to society — were a commodity to be bought and sold on the open market. For them, society was nothing, but an agreement among the privileged to respect each other’s property rights.

Macpherson argued that such a society is demonstrably selfish with an unending thirst for consumption, considered the crucial core of human nature. He also argued that this culture of possessive individualism prevented individuals from developing their powers of rationality, moral judgement, contemplation and even friendship and love, which are the ‘truly human powers’.

Neoliberals took the cue from Milton Friedman and Friedrich Hayek who believed that if most of the regulatory and welfare activities of Western states were discontinued, freedom would be advanced. But this is not on Macpherson’s positive conception of freedom.

Macpherson confidently held that the materialistic drive of unfettered capitalism which glorifies greed as ‘good’ posed a stark challenge to liberty and democracy.



MORE than three decades after his death, Macpherson’s diagnosis seems very prophetic — liberal democracy has fallen into a world crisis.

Liberal democrats were working to make capitalism and democracy safe for property. But to their right hardnosed businessmen, economists and politicians were working on an extreme version of capitalism, came to be called ‘neoliberalism’. And those to the left moved to the centre cloaked as ‘third’ or ‘new’ way.

Both right and left, thus, worked in favour of unfettered market, dismantling the grand bargain that made liberal democracy safe. As multinational corporations–led globalisation gathered unprecedented pace, workers were increasingly pushed to precarious jobs and the middle class — the rock-bed of liberal democracy — to economic insecurity.

Paradoxically, they are flocking to the extreme right, believing that the so-called ‘wealth creators’ will pull them out from the pit they were thrown into by the centre left.

As noted in a recent column in conversation, ‘In the possessive individualism of classical liberalism, we find the seeds of today’s democracy crisis’.


Anis Chowdhury, an adjunct Professor at Western Sydney University and the University of New South Wales (Australia), held senior United Nations positions in New York and Bangkok.

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