Can liberal democracy survive? Yes,
actually.
The fear and angst in western democracies is palpable. The threat from populists of the right is serious. But the reasons driving all this aren’t the ones you’ve been told.
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| Of the 193 member states of the United Nations, just 24 are 'full democracies' |
When time flipped from one millennium to the next and a new
century began, the future of liberal democracy seemed assured.
Eight years and one week earlier, the Soviet Union had formally
ceased to exist. The Cold War, which for sixty years had threatened nuclear
catastrophe, was over. Almost half of the world’s people were now living in countries
classified
as “liberal” or “elective” democracies.
Twelve months and twenty days into the new century, George W
Bush replaced Bill Clinton in the White House. Then, twenty-one months in,
religious maniacs crashed two airliners into the World Trade Centre in New York
and another into the Pentagon, just outside Washington DC.
And so the airy visions of a new age of peace under the
benign guidance of an unchallengeable United States were shown to be fantasies.
The new century was not to be like that after all.
Crisis followed crisis: climate change, the Global Financial
Crisis, the Covid pandemic, Britain’s retreat from the European Union, wars in
Ukraine and Gaza, Xi Jinping’s brutality in Hong Kong and the threat of war
over Taiwan, trade wars, Russia’s descent into aggression abroad and repression
at home.
Now, liberal democracy is in trouble. According to the
Economist Intelligence Unit’s democracy index, the United States, which was once
seen as a beacon, has been downgraded
to the status of “flawed democracy”. Only 24 nations are classified
as full democracies; another 50, including the US, are flawed democracies; 33
are hybrid regimes like Hong Kong and Turkey, with only vestiges of political
and social freedom remaining; and 58 are “authoritarian”, with no pretence of
freedom.
Almost everywhere, democracies are backsliding and
authoritarians extend their suppressive rule.
What happened to those ardent expectations that seemed, not
so long ago, to be within our grasp? Are they gone forever? Or is there a
rational basis for hope?
An examination of what’s causing the pervasive sense of
democratic angst – and what is not causing it – shows that the way back
may already have begun. Optimism is permitted.
The drivers
of dysfunction
The times are out of joint. Throughout most of the western
liberal democracies, trepidation rules. The moderate Left is weak and in
disarray; the moderate Centre Right is outflanked or captured by populist
demagogues from the hard right and far right: Trump, Le Pen, Wilders,
Netanyahu, Johnson, Dutton.
In the background is the promise of destruction: climate
change, Putin, Xi, Ukraine, Gaza. In the foreground are cost of living,
housing, unaffordable and inadequate healthcare, fears about personal safety.
Lines from W.B. Yeats’s apocalyptic poem The Second
Coming are being quoted in newspaper columns:
Mere anarchy is loosed upon
the world.
Millions of ordinary people feel so alienated, so detached
from those with power, that they just want to blow the place up. And so they
turn to far-right populists who proffer ringing and simple answers to
intractable problems that can only be resolved, if at all, by time and careful
wisdom.
The times are out of joint: but they usually are.
Yeats published that poem in 1919, just after the worst war humanity had ever endured, but which presaged the most
appalling half-century in the whole of modern history. It continues:
The blood-dimmed tide is
loosed, and everywhere
The ceremony of innocence is
drowned;
The best lack all conviction,
while the worst
Are full of passionate intensity.
Fear of the apocalypse comes in waves. Occasionally,
something very close to that happens: in 1914, political madness and diplomatic
incompetence led the world into the first world war (20 million deaths), the
second world war (75 million deaths) and the depression (economic collapse and
social wreckage on an almost unprecedented scale).
Despite the current pervasive sense of angst in western
liberal democracies, we face nothing like that today. That does not mean the
challenges are not serious and the risks immense. Of course they are. But our
situation, now, is not out of control. It can be managed. But to manage
successfully in a period of conflict, polarisation and pessimism, we must first
understand what is going on.
What are the drivers of our predicament? What is the
prognosis for those? By identifying and examining those drivers we can,
perhaps, discover our future and take control of our fate.
Many factors are at play at every pivot-point of history,
such as the one we are now living through. But three stand out: the national
and global economies; social and economic inequalities; and mass migration.
And we can look at the impact of these in particular
settings: in this case, in eight western nations, in all of which these three
factors are at play. The eight are Australia, Britain, the United States,
Denmark, France, Hungary, Germany and Italy.
The paradox
of economic growth
It has never been true that a rising tide lifts all boats,
but it at least gives them a chance. A spluttering economy that flatlines or
falls will leave millions going backwards – or, more often, feeling as if they
are.
So far this century, the world has had to deal with two
major shocks: the Global Financial Crisis and the pandemic-induced recession.
Of all the developed economies on our list, Australia has fared the best,
suffering a comparatively mild downturn in 2020 and missing out on the “Great
Recession” altogether. By 2022, when the pandemic had receded, Australia’s
per-capita economic output had grown by 33% in inflation-adjusted terms, equal
to the 27-nation European Union but well ahead of the others. Britain managed
only 23%.
The EU’s apparently strong result was boosted by swift
growth in the newly-admitted nations of eastern Europe. The core did less well.
Over 23 years, Germany improved by 26%, Denmark by 23% and France by only 17%.
Long-term real growth averaging less than 1% a year is hardly stellar
performance.
Though starting from an admittedly low base, Hungary’s rise
of 82% for the period shows how much better the former centrally-planned
communist nations of eastern Europe performed when they embraced capitalism and
joined the EU. Italy is at the other end of the scale, with no significant
improvement at all since the beginning of the century and ending just 3% higher
than in 2000.
In 2000, Hungary’s GDP per head was 55% lower than that of
its neighbour, Italy; by 2022, it was only 20% lower.
This chart shows the relative performance of the eight
nations, plus the EU. After Hungary, Australia’s growth was the strongest of
them all.
Of the seven fully developed economies, the US leads the
pack, as it always has. France, Italy and Hungary – for very different reasons
– are at the other end. No country has actually gone backwards, but France and
Italy have come uncomfortably close.
Broad economic conditions explain relatively little about
the rise of far-right populism in Europe and America. The clearest correlation
between populism and the economy is to be found in Italy and, to a lesser
extent, in France. By itself, it does not explain the rise of the right and
far-right in Germany and Denmark, nor the rush to Brexit and populism in
Britain led by Boris Johnson and Nigel Farage. It does not explain the allure
of Donald Trump.
Nor does it explain the crippling polarisation of politics
and society in many of these nations. We must look deeper.
Who gets
what?
Political polarisation thrives when substantial sections of
a national population feel left out. That has always been so: there has never
been a time when everyone had a reasonable share of prosperity. But decades of globalisation
have simultaneously boosted aggregate economic growth while wrecking the
fortunes of swathes of formerly productive, prosperous communities.
This happened with the north of England under the
de-industrialisation policies of Margaret Thatcher. It happened again in the
United States, where one of the world’s manufacturing hubs in the country’s
mid-west became a depressed rust belt, ripe for Donald Trump’s seductive fantasies.
The Gini coefficient is the most commonly used broad measure
of inequality. The scale goes from zero (where everyone has an equal share) to
1 (where one person owns everything).
Of the eight nations we’re examining, income inequality has
risen so far this century in all but two. The US was by far the most unequal in
2000 and is now much worse. But the biggest increase has been in Denmark.
In the EU, taken as a whole, has marginally fallen. And the increase
in Hungary is typical of nations with fast-growing emergent economies.
When large parts of a population see, upon good evidence,
that the benefits of economic activity are denied to them and instead flow to a
very few powerful, privileged and rich people, anger and resentment are likely
to follow.
Figures on the share of national income going to the top 1%
versus the bottom 50% are a much more revealing measure of inequality than
aggregate economic growth. All of these countries have an inequality problem
but the United States, Denmark and Italy stand out. It is hardly coincidental
that people in each of these three nations are susceptible to the promises of
right-wing populist politicians.
Severe income inequality can be, to some extent, ameliorated
by a progressive regime of taxes and benefits. In such a scheme, which is
employed to various degrees by all eight nations, people earning more pay a
higher percentage of their income in tax; and though nobody can entirely escape
taxation, the poorest may pay very little.
For benefits, it is the other way around. Almost all of
those elements of the “social wage” –
welfare payments, health programs, public education – accrue to those in the
bottom half of the income hierarchy. France and Denmark redistribute more
through their tax and benefits systems than the other countries on the list:
around a third, against around a quarter.
But income is not the main part of the inequality story.
Accumulated wealth accounts for a much greater share of a nation’s economy than
income.
Even these numbers do not show the full extent of wealth
inequality. In Australia, just two people – Gina Rinehart and Andrew Forrest –
together hold as much wealth as the bottom 5.5 million Australians. In the US,
it is even worse. In 2000, the richest 0.1% owned 148% more wealth than the
bottom 50% of the population. By 2023, the gap had expanded to 429%: $US19
trillion for the richest 0.1% against $US3.6 trillion spread around 50% of the
American population.
Reality
check: unemployment, housing
There are many reasons for a sense of unease but it is
difficult, from the available data, to see why people in many countries seem so
much more susceptible than usual to conspiracy theories, generalised pessimism and
the proffered solutions of right-wing populists and fabulists. The most obvious
conclusion is that this palpable sense of unease is perhaps less about reality
than about what we are being urged to believe.
Things are bad for some people in some places, but that’s
all. Most people, most of the time, aren’t doing too badly.
Take employment. High and persistent unemployment can create
massive social and political stress. Desperate people who feel they have little
to lose are often prepared to try anything. But that’s not the situation now.
In each one of the eight countries we’ve been tracking,
unemployment is low and heading lower. In most, it’s better than it has been at
any time in the century so far.
There were obvious problems during the GFC, particularly in
the US, Britain and Italy. Earlier, Germany had problems of its own but solved
them with reforms of the labour market and other measures. Even in Italy and
France, the rate of unemployment, which still far too high, is clearly heading
downwards.
How can Hungary’s unemployment rate of 3.6% justify the
continued rule of Victor Orbán? How can 3.1% in Germany explain Alternative für
Deutschland?
Housing is a major problem almost everywhere, only partly as
a result of central banks increasing interest rates to crush inflation. Data
for the nations of the OECD show prices were increasing well before the
pandemic. Average costs increased sharply for about two years from 2020 but
then stabilised.
The impact of housing stress on the poorest 20% of national
populations is real and harsh but – again – unevenly spread. The most serious
impact is in the United States and Britain, where 49% of households in the
lowest quintile are spending more than 40% of their income on rent.
These figures do not explain why the social and political
angst in France, Italy and Hungary is so much worse than in Australia, Britain
and Denmark.
According to the OECD’s
housing experts, much more social housing needs to be provided.
“Total public investment in housing development alone was
nearly cut by 90% between 2009 and 2016,” they write.
But they also say this: “Since 2016, public investment in housing has
slowly began increasing, despite remaining below the peak in 2009. Between 2016
and 2021, total public investment in housing and community amenities increased
by roughly 40%.”
It’s a longer-term issue. In the three decades after World
War 2, governments conducted huge social housing programs to accommodate those
made homeless by wartime destruction and to alleviate the effects of poverty.
When the welfare state went out of fashion in the 1970s, those programs were
slashed, never to fully recover.
Although there’s little difference in the provision of
social housing between the US, Australia, Hungary, Germany and Italy, it’s
notable than in all of these eight countries other than France and the US, the
proportion of social dwellings has shrunk as a proportion of all housing since
2010. That’s serious: it means that although more social housing has been
provided, it has failed to keep pace with overall growth and demand from
increasing populations.
The failure
of trust
The sources of democratic dysfunction are less to be found
in the factors usually cited – economic growth, employment or even inequality –
than in the more nuanced elements of social function. The pervasive sense that
things are going wrong can be found in the decline of social cohesion and trust
of those in authority and of each other. Without that broad confidence and
trust, no polity can function.
Social capital refers to all of these, rendered into a
single metric. These figures, put together by the OECD from a multitude of
sources, shows that between the end of the GFC and the end of the pandemic,
social capital over the eight countries fell in all but two:
Denmark and Germany.
Local factors affected these results in all cases. The
plunges in Denmark, Italy and France
between 2010 and 2015 coincides with disquiet over migrants from the
Middle East. Australia fared well during the GFC but confidence fell during a
period of political volatility and leadership churn. Hungary improved but its
score remains below 50.
Trust in government is a key component of social capital.
Not coincidentally, this measure closely follows the broader social capital
index.
Widespread downgrading of civil rights is a cause and a
symptom of social and political failures. Personal freedoms have declined within
four of the eight countries: Denmark, France, and (more strikingly) Italy and
Hungary. None of the countries has improved its civil rights score.
Cost-of-living is often cited as a fundamental cause of
discontent. But the affordability of ordinary living costs is dependent not
only on income but also on purchasing power. Hungarians earn less per head than
Danes, Australians or Americans, but they are able to buy twice as much.
Consumer price inflation has often outpaced wage growth across many countries
in the past several years, but this is not a long-term trend. And it does not
explain why Hungary, France, Germany and Italy are facing so much more
political and social angst than Australia or Denmark.
Social isolation seems to be a better fit. According to OECD
surveys, 16% of Hungarians do not have friends or relatives they can rely on.
That’s three times the rate of Denmark and Australia.
Even so, the mood in Hungary seems brighter than it was at
the turn of the century. Its happiness score is still the lowest of the eight
nations but has shown marked improvement. This is in line with improved
economic conditions.
A related measure, life satisfaction, shows similar results.
Hungary retains the lowest score but has shown the greatest improvement.
Germany’s mood improved slightly but all other countries – particularly the US
– became gloomier.
People in all countries are less likely to trust those of a
different background to themselves. Across all eight nations there are
relatively high levels of trust for those we feel we know: our neighbours. But
that trust is less likely to extend to those who are different to ourselves:
people from another country or, particularly, people of another religion: in
most cases, that religion is Islam.
Trust in journalism is one of the most serious and revealing
indicator of the level of angst affecting democracies. If the basic traditional
sources of information cannot be trusted, how can social and political cohesion
thrive?
Those states with the least trust are those in which major
elements of media are controlled by politically partisan owners (such as Rupert
Murdoch and others in Britain and the US) or by government interference (as in
Hungary).
The survey quoted here did not cover Denmark, so Sweden has
been substituted. 'Don’t knows' are excluded.
Broadcast journalism attracts somewhat greater trust than
print. The presence of non-partisan and independent publicly-funded
broadcasters such as the BBC and ABC are critical to this increased confidence.
But trust and truth do not always coincide: plenty of people in the United
States trust Fox News.
All of these results are troubling, not only in France and Hungary. For a liberal democracy to function properly, the people must have high levels of confidence in the accuracy and probity of their sources of information. But the rates of high confidence shown in this and other surveys are disturbingly low; they are matched or exceeded by those with no confidence at all. If someone has zero trust in journalism, they are likely to turn to less orthodox sources. Populists and conspiracy theorists thrive under these conditions.
The vast majority if people in all these countries are
deeply suspicious about journalism, reporting either lukewarm confidence (some
trust) or significant misgivings (somewhat distrust). These results help to
explain, in a way most of the commonly cited factors do not, the widespread
erosion of confidence in democracy and in democratic governance.
Mass
migration and its discontents
The waves of refugees and asylum seekers that have been
unmatched since the end of the Second World War are a fundamental driver of
democratic discontent and, along with pre-existing social disruption, explain
much about the rise of the hard-right and far-right. Its impact has been
magnified by terrorist attacks and crime levels that reflect on entire migrant
communities, a factor eagerly exploited by the right-wing political
opportunists.
The UN refugee agency estimates that at the end
of 2023, 117.3 million people were forcibly displaced “as a result of
persecution, conflict, violence, human rights violations or events seriously
disturbing public order.”
Three quarters of those are living in low-to-middle-income
countries, mostly neighbours to the nations from which they have fled. “Of the
117.3 million forcibly displaced people, an estimated 47 million (40 per cent)
are children below 18 years of age,” the agency said. “Between 2018 and 2023,
an average of 339,000 children were born as refugees per year,”
And 39% of the 117.3 million are hosted in just five
countries: Iran, Turkey, Colombia, Germany and Pakistan. This is important:
only one of the five is a western liberal democracy. Other western countries,
with the exception of the United States, have comparatively low numbers – but
in all of them, refugees and asylum seekers are a major and troubling political
and social issue.
According to the UNHCR, people fleeing from Afghanistan and Syria
head the list of displaced people. Next comes Venezuela, Ukraine and South
Sudan.
In each case, by far the majority remain in the area. Of the
11. 5 million Afghans forcibly displaced, 4.8 million, or 42%, remain in
Afghanistan. Of the rest, most are in two neighbouring countries: (Iran, 32%)
and Pakistan (18%).
Germany has taken the largest number of any European nation – but that’s still only 2.6% of the total. Turkey has taken 1%. All other countries account for only 4.2% of all forcibly displaced Afghans.
It’s a similar story for Syrians. Even now, a decade after
that exodus began, 78% of the 29.8 million people forcibly displaced remain in
Syria. Germany has taken 2.6%. Most of the rest are in Turkey (10.8%), Lebanon
(2.6%), Jordan (2.2%) and Iraq (0.9%).
All other countries account for just 2.8% of the total.
Of the 10.6 million Venezuelans displaced, 30% remain in
that country. Only 5.1% have reached the United States. Almost all the rest are
in other poor countries in South and Central America.
As a proportion of total populations in host western
countries, refugees and asylum seekers remain relatively insignificant in all
of the eight nations on our list, with the possible exception of Germany.
Migration from troubled countries to developed western
democracies relieves only a tiny proportion of the problem but even these
comparatively small numbers have resulted in substantial political and social
disruption within the host nations.
Much of the unease and opposition to the migrants arises
from the perceptions – and the reality – of crime. There is surprisingly little
useful statistical information on the extent to which refugee and asylum
seekers from particular nations commit crimes in their host nations. Overall
crime statistics are not useful here: because these migrants comprise a small
part of the total population, broad numbers of offences can be relatively low
but the rates of offending by some groups may be, and sometimes are, very
high.
The most notable study of the question was published by
Statistics Denmark in 2014, before the two successive waves of movement to
Europe from Syria and then from Afghanistan. Nevertheless, the study is
revealing and disturbing.
People from the Middle East, Africa and southern Asia have
very high rates of offending. People coming to Denmark from Lebanon (which
includes many originating in Palestine) were more than three times as likely to
be found guilty of a criminal offence as native Danes. Overall, Danish
authorities have repeatedly found that migration from other western democracies
reduces the crime rate; migration from the Middle East, Africa and southern
Asia increases it.
These findings profoundly influenced Danish immigration
policies. Under governments of the centre-right and the centre-left, Denmark
has pursued some of Europe’s toughest immigration regimes. They have been
criticised abroad but are so popular domestically that there seems little
likelihood of any relaxation. Rather, further toughening is probable.
“In 2021,” reported
Politico recently, “the country passed a law that could allow refugees
arriving in Denmark to be moved to asylum centres in partner countries, such as
Rwanda, a proposal which the European Commission criticised. It also looked
hard at detaining asylum seekers on a remote island.
“[The former centre-right government] introduced nearly two
dozen ‘ghetto laws,’ classifying more than two dozen immigrant-heavy
communities as ‘ghettos.’ Children born to immigrants would be forced to
assimilate into Danish society through mandated 25 hours of separation from
their parents. One of these laws mandates forced integration of thousands of
residents in these two dozen neighbourhoods by demolishing housing blocks.”
These laws were not only embraced but extended by the Social
Democrat government which took power in 2019. And though other countries in
Europe initially criticised this approach, they have increasingly adopted
similar tough measures of their own.
Statistical agencies in other countries do not seem to have
conducted similar investigations, but the absence of reliable data has provided
far-right activists and populist politicians with an opportunity to invent
their own supposed reality.
Migrant crime rates are driven by many
factors including poverty, inability to speak the language, unemployment
and poor education. One study
found crime rates in Germany increased a year after arrival and particularly
involved property and violent crimes. It found that while the crime rate per
refugee was small, the collective impact was large.
But a clash of cultures can also be heavily implicated. Many
of these migrants come from highly conservative religious backgrounds with
attitudes to (for instance) women and homosexuality. And these factors can
produce troubling incidents that do not appear in the crime statistics.
Also in 2018, arrests were also made in Paris, where another
Islamist group – acting in the name of Islamic State – planned multiple attacks
on gay venues and events.
In the Netherlands, strings
of attacks on gay men have been committed by young Moroccan men.
Just as during the wave of murders and bashings in Sydney in
the 1980s and 1990s, it is probable that most incidents of anti-gay assaults
and harassment are unreported. But they contribute powerfully to a sense that
these migrants, seeking protection in tolerant liberal societies, are
antagonistic to the basic values of their countries of asylum. In turn, this
feeling of deep unease is eagerly exploited by the enemies of tolerance: not
only neo-Nazis and the other creatures of the far right but also – and much
more importantly – by value-free political opportunists driven not by the
welfare of the people but only by lurid visions of their own power and glory.
The
prognosis
To discover how to deal with the democratic angst, we must
first discover what it causing it, and what is not.
Many proposed contributors seem not, on close examination,
to be likely culprits – mostly because these factors were at play in previous
decades when there was no such fear about the state of democratic government.
If these factors did not produce such a result before, how can they be blamed
for causing it now?
Broadly, and despite the temporary impact of moderately high
interest rates, economic growth is fairly health across most of the eight
“bellwether” countries in our survey. Income and wealth inequality has
worsened, but this is a long-term trend going back well into the last century.
Unemployment rates are lower than they have been for many decades.
And these economic factors do not play out in ways that
explain the significant differences between those eight countries. For
instance, economic conditions in Hungary have improved dramatically since the
turn of the century, and cannot explain the rise of Viktor Orbán. Similarly,
Germany and Denmark have done well on most economic indicators, so this does
not explain why the far-right in Germany is causing so many problems, nor why
Denmark has retreated so strikingly from its once-liberal approach to crime and
rehabilitation.
And why would historically minor and transitory economic and
social hiccups have such an effect when much bigger disruptions in previous
decades did not? Since the Second World War, we have lived through the threat
of nuclear annihilation in the fifties and sixties; oil shocks and stagflation
in the seventies; 18% mortgage rates in the eighties; and savage recession and
high unemployment in the nineties. If not then, why now?
To explain what is going on, we are left with only two broad
areas of dysfunction: widespread weaknesses in social cohesion, and the impact
of mass migration of refugees and asylum seekers.
Around the developed world, the gates are slamming shut on
irregular migration. Countries are able to close their borders and, though the
methods may be brutal, governments are
being given no choice by their electorates.
In any case, migration to developed countries is not a
solution to the massive problem of forcibly displaced people: the numbers are
too vast and the proportions reaching the west are far too small. If there is
any solution at all, it will have to be within the regions that refugees come
from. Liberal democracies have a moral obligation to help that process but
whether they will, or can, is questionable. The human tragedies will continue.
But western countries can, and will, shield themselves.
A less manageable threat to democratic polity is entrenched
deep within our societies. Liberal democracies cannot function without common
acceptance of its values and procedures. In five on the nations on our list,
fewer than 50% have confidence in the basic goodwill and competence of their
governments. Of the other three, none score above 60%.
Trust in the sources of information is worse. Huge numbers
of people no longer believe what they read in the newspaper or see on
television. There are good reasons for this: news outlets have been hijacked by
proprietors as political playthings. Between The New York Times and Fox News,
the BBC and the Daily Mail, or The Sydney Morning Herald and the Daily
Telegraph, which do you choose?
The fragmentation of information media amplifies the
problem. It is the job of journalists to tell the truth but if their audiences
don’t believe they are being told the truth, lies are readily believed instead.
But none of this means the democratic project is in a
terminal phase. Just the opposite.
The prospects of far-right populists taking control of the
major democracies have been massively overblown. As long as a workable election
system remains in place, these people are as vulnerable to the electoral cycle
as anyone else. Even if they attain power, and most don’t, their unsuitability
for government becomes quickly apparent. They have no workable answers to the
problems they promise to remedy, and the winds of political reality can be
particularly chilly for unclad emperors.
A second Trump presidency is looking less likely by the
moment. Marine LePen lost the French elections yet again.
Alternative für Deutschland appears to have passed its peak
without coming close to power. The snake oil of Boris Johnson and Liz Truss was
quickly revealed as a poor substitute for serious governing.
In Denmark, Social Democrats are solidly in power.
Populists and would-be dictators can remain in power under
only two conditions: either by repression, or by the absence of a viable
opposition.
It was the absence of opposition that allowed Boris Johnson
to win the 2019 British election, for Trump to lead the polls until recently in
the United States, and (combined with repression) for Viktor Orbán to remain in
power for 14 years. In the US and Britain, political fortunes swung wildly when
viable progressive alternatives appeared.
It has been a difficult few years for liberal democrats but the evidence supports optimism about the future. Don’t bet against democracy: you’ll lose.