By Kevin Albertson, Professor of Economics at Manchester Metropolitan University with a background in statistics and political economics. He is co-author of five books, including the Haynes Guide ‘How to Run the Country’. Originally published at openDemocracy
Democracy is unwell, so it is said. In America and other leading democracies citizens are apparently increasingly critical of the concept of liberal democracy. We argue this is a misdiagnosis; citizens are not critical of liberal democracy – it is the lack of democracy which is the problem.
Citizens are attracted to strong leaders (so-called “populists”) which are prepared to challenge the prevailing system, not because they distrust democracy, but because they perceive the prevailing system is fundamentally undemocratic.
The solution is not further to limit democracy for fear of popular leaders, but rather to increase democratic accountability, and therefore legitimacy.
Recently, Foa & Mounk argued that many citizens in supposed advanced democracies have become rather disillusioned with the workings of the political system in their nation. There is good reason to suppose the current political economic paradigm is skewed against the people. So-called democratic deficits exist in the USA and elsewhere. In the UK, for example, the electorate disapprove and have disapproved of four decades of tax and welfare and privatisation policies – yet are apparently powerless to influence these policies.
As politicians and the donors who support them become less responsive to voters’ wishes it is hardly surprising many, perhaps the majority, of the populace will view government as illegitimate. In consequence, voters seem increasingly inclined to elect (so-called) populist leaders, political outsiders who may change the rules in favour of the people.
The Left and the Right
Legitimate government, so Abraham Lincoln observes, is that which does for a community that which the community cannot do (or cannot do so well) for themselves. With this it is difficult to disagree. However, political theory differs on who might make up that community.
Broadly speaking, those on the (so-called) economic “right” argue government should enact policy for the benefit of those who own the nation, while those (so-called) economic “left” consider policy should prioritise the interests of citizens. By definition, therefore, capitalist governments will take up positions on the right – particularly in nations, such as the UK, which are increasingly owned by foreign interests. Conversely democratically accountable governments must take positions economically to the left, prioritising the preferences of citizens.
Universal Adult Suffrage
At the dawn of democracy, only the wealthy could vote. Thus, there was less conflict between the aspirations of the powerful and of voters. Following the extension to the adult population of the right to vote in the late 19th and early 20th century, politicians became answerable to a wider range of stakeholders.
In particular, from the middle of the 20th century until the late 1970s, legitimate democratic governments held markets to account in the interests of the demos. An increasingly affluent society facilitated profit making opportunities and thus economies grew; the interests of capital and citizens coincided.
However, since the late 1970s, global economic growth has broadly slowed. It is likely that economic stabilisation has occurred as a result of the slowing pace of innovation and the world reaching (or indeed overshooting) its carrying capacity. However, many were persuaded that the slowdown in growth occurred because governments interfered too much in markets.
In response, to preserve or increase their own income growth, elites are motivated to argue for the “freeing” of markets. Rather than markets being held accountable to citizens through democratic governance, it was suggested that holding governments (and through them the citizenry) to account through reliance on market forces would facilitate a return to economic growth.
The Washington Consensus
The economic paradigm which promotes the small state and reliance on market forces is generally known as neo-liberalism, or the Washington Consensus. Under neo-liberalism, the state does little more than maintain the rights of ownership and internal and external security through criminal justice and armed services – notwithstanding, the state may bail out financial services if they require public aid. In the UK and the USA politicians from both main parties adopted this point of view, often in sincere, if misguided, belief in its validity. Thus, neo-liberalism maintains the appearance of democracy, in that citizens may vote for political leaders, but limits the range of policies on offer to those which are acceptable to markets – or rather, those who command market forces.
It should be emphasised that the promotion of the neo-liberal political economic paradigm need not result from a conspiracy. History indicates that, in any prolonged period of peace, power and wealth tend to accumulate to fewer and fewer individuals. If markets were sufficient to facilitate improvement in the prospects of citizens in general, there would have been few calls for universal suffrage in the first place.
Neoliberalism: Government of the People, by the Market, for the Profit
Since the introduction of neo-liberal socio-economic policies, inequality has increased amongst the citizens of the world’s advanced democratic nations. As it has not addressed the root cause of economic stabilisation, the adoption of the neo-liberal political paradigm has not improved the prospects of growth, or stabilised global ecosystems. The growth in incomes of the elites – those who wield market power – has come at the expense of the electorate in general.
Because liberal social attitudes are undermined in increasingly unequal societies, neo-liberal policies have destabilised the social equilibrium of those nations which have adopted them. Reliance on market forces has, paradoxically, even undermined the market; for example, through the Global Financial Crisis and the Eurozone crisis. Curiously, despite these failings, yet more reliance on markets is suggested as the cure.
Democracy: Government of the People, by the People, for the People
Those citizens whose prospects are undermined by the neo-liberal paradigm see it in their interests to support a “strong man” who may change the rules back in their favour. This is a risky strategy; such strong men may rather change the rules in their own favour, or in favour of their supporters. In consequence some have suggested we might consider further tempering democracy. However, we suggest it is the reduction in democratic accountability which has led to this so-called “populist” state of affairs. The solution is rather to increase democratic accountability, not just in central government, but in local government and in our places of employment.