Boston Review丨What can be done to save democracy?

 This article is a book review.
    The author Pranab Badhan received his undergraduate education in Calcutta, India. From 1977 to 2011, he taught in the Department of Economics at the University of California, Berkeley, and is currently the Distinguished Emeritus Professor of the school. The main research fields are development economics and political economics. His most recent author is A World of Insecurity: Democratic Disenchantment in Rich and Poor Countries (Harvard University Press, 2022).
    The book reviewed in this article, The Crisis of Democratic Capitalism, will be launched by Penguin Random House in February 2023. Its author, Martin Wolf, was born in 1946 and is the chief commentator of the Financial Times.
    This article believes that Martin Wolf’s diagnosis of the origins of the “crisis of democratic capitalism” and his response prescriptions are seriously lacking, and he underestimated the cultural factors that stimulated the rise of right-wing populism. The author points out that we cannot simply assume that as long as capitalism flourishes and economic gains are distributed more equitably to a certain extent, democracy can be saved.
    The original title of this article is "What Will It Take to Save Democracy?", published by "Boston Review" on March 14, 2023. The Boston Review was founded in 1975 as a quarterly publication, then bimonthly. It is currently registered as an independent, non-profit political and cultural forum.
    The translator listened to the bridge and divided the original text into multiple paragraphs and added subtitles.

What can be done to save democracy?

Pranab Bardhan

Martin Wolf, one of the most respected economic journalists in the world today, uses a metaphor he often uses in his new book, The Crisis of Democratic Capitalism . The displeasure is that the traditional marriage between capitalism and democracy in rich countries is on the verge of collapse.

Wolff believes that "democratic capitalism" is the best system to promote general welfare. But he believes that the system is beginning to suffer, because capitalism is no longer productive enough to achieve high growth, and rising inequality has created widespread pain and distrust in the basic institutions of liberal democracy. On the one hand, the plutocrats are hoarding wealth and dismantling policies designed to promote inclusive prosperity; on the other hand, a segment of the middle and working classes are resisting by embracing ethno-nationalist demagogues who offer seductive but Ultimately, empty promises are destroying due process and political rights. Wolf believes that restoring a common sense of citizenship through common interests and loyalty to the common good is the only way out, but he does not have much hope that the United States will still maintain democracy before the end of this decade.

Wolff's analysis is both broad and nuanced, and we can glean some valuable lessons from it. But overall, the book has some serious shortcomings in both diagnosis and prescription. He tends to underestimate the cultural factors that spurred the rise of right-wing populism, and his reform proposals are too cautious and lack depth in their conception. In addition to economic insecurity, cultural status anxieties and resentments may best explain why high-income countries have embraced anti-democratic elements.

This is not a reason to condone economic inequality; on the contrary, we should do much more than Wolf suggests to combat it. But this is a reason to question the claim that as long as capitalism thrives, and as long as economic gains are distributed more equitably to some extent, democracy can be saved.

How democratic compromise is corrupted

Wolff begins with a brief history of democracy, a history that appropriately goes back to Athens two thousand and five hundred years ago. (What seems not to be widely known, and what Wolfe fails to mention, is that some forms of democracy emerged in a variety of places throughout the ancient world, including among Native Americans and Indo-Buddhist communities.) Referring to past centuries, Walle He did not mention the vast amount of literature on the origins of democracy, which has some implications for understanding the crisis of democratic capitalism today.

Part of the book sees democracy, primarily in Europe, as a compromise between two groups: the economic elite, who are interested in securing property rights but fearful of mass unrest; Working class and peasants, they clamored for political rights. Bargaining between them expanded suffrage and political representation, and ensured the rights of speech, assembly, and association, which ultimately resulted in a welfare system of varying intensity that moderated workers' demands. In this arrangement, economic elites have the power of wealth and workers have the power of numbers, but group interests have clearly always been more important than Wolf emphasized: the idea of ​​civil rights with a shared belief in the common good. Although this theory of the origin of democracy based on interests has nothing to do with the role of liberal ideas and cannot form a complete explanation, it will not be completely ignored.

One approach to understanding the current crisis is to look for factors that explain the breakdown of this historic compromise. Money has become so much more influential in politics, both in terms of lobbying for business-friendly laws and regulations and in electing complicit politicians through corporate donations, and election spending has grown so large that economic elites no longer need to be in workers' politics. There have been as many compromises on entitlements and spending on welfare systems. The United States is a country where money is most rampant in political life. It is also a country where anti-union policies are implemented worse than in other rich countries, and the worker safety net provided by the welfare state is quite fragmented.

In addition, the rule of law that these democracies boast is often hollow, and many laws are essentially up for grabs. Center-left parties led by Tony Blair, Bill Clinton, and even Barack Obama always struggled electorally (and lost the moral support of many independents) because they remained loyal to the big business groups that built Campaigns provide significant funding, thereby severely constraining policy.

At various points in the book, Wolff has plenty of reasons to be aggrieved about the malignant influence of money, but other than to urge that it should be curtailed, he devotes not much space to possible proposals for reforming the system. There is much to learn from the experience of Belgium, Spain, Germany, Sweden and Canada in providing public funding for elections or political parties, and in some of these countries restricting party and candidate spending. Julia Cagé made a series of recommendations in her 2020 book The Price of Democracy. Perhaps not all of her proposals will be easy to implement, but at least eliminating tax deductions for (large) private political donations should be feasible. In recent years, some political candidates have been equally successful at crowdfunding or raising small donations from many people. (Julia Cage is an associate professor at the Department of Economics at Sciences Po in Paris. - Translation)

Democratic compromise is also undermined in other ways, in some ways more insidious. In the simplest and clearest compromise stories, the working class is identified as united by economic demands (e.g., a minimum wage or public health benefits they typically support) and cultural demands (e.g., opposition to gay rights or abortion, or The wedge between those opposed to gun control (the special case of the United States) tends to divide them. Elites are helped in this regard by the growing occupational, geographical, lifestyle and attitudinal divide between more educated and professional knowledge economy workers and less educated blue-collar workers . Thomas Piketty derided the former as the “Brahmin Left,” but this segment of the population also happens to be more sympathetic to society than the wealthy “Merchant Right” and the working-class right marginalized groups, namely immigrants and ethnic minorities. (Thomas Piketty, born in 1971, is a French economist who teaches at the Ecole Haute Supérieure des Sciences Sociales and the Paris School of Economics. - Translation annotation)

In addition to corroding the common basis for working-class demands, the ways in which divisions within the working-class affect the functioning of democracy include outright exclusion or oppression. As Sharun Mukand and Dani Rodrik point out, in democratic compromise some groups that have neither wealth nor numbers—the various minorities in society ( such as defined by race, religion, language, gender identity, or sexual orientation)—are often left out. If tensions arise between them and the majority, their civil and political rights are threatened; the protection of the rights of these minorities depends on special constitutional rules and an independent judiciary that implements those rules. As populist demagogues have recently demonstrated, if those rules and institutions do not exist, democracy can degenerate into majoritarianism, or what James Madison called "the tyranny of the majority." (Sharon Mukand, professor of economics at the University of Warwick, UK. Danny Rodrik, born in 1957, is a Turkish-American economist who teaches at the Institute for Advanced Study at Princeton University. James Madison, born in 1751, died in 1836, served as President of the United States from 1809 to 1817. - Translator's Note)

Both of these divisions involve cultural issues that receive insufficient attention in Wolfe's book. Although he mentions some cultural factors, he prioritizes economic factors: slower productivity growth, job losses due to trade turmoil or automation, the 2008 financial crisis, unearned rents and excess profits for elites, and the resulting Rising or high levels of inequality are a source of anxiety and anger among the working class. It's not so much the current state of the economy that Wolf emphasizes, but the slowdown in intergenerational mobility that is making workers especially anxious about their children growing up, even if they themselves have stable jobs.

As economist Raj Chetty and his co-authors point out, by age 35 or so, children born in the United States in 1940 have a 90 percent chance of earning a higher income (adjusted for inflation) than their parents. ); For children born in 1980, this chance is reduced to about 50%. (Chaiti is a professor in the Department of Economics at Harvard University. - Translator's Note)

downplayed cultural issues

It seems to me that these obviously big economic issues are intertwined with equally important cultural issues, but in chapter titles like "It's the Economics that Matter, Dumb" Wolfe downplays the role of cultural issues.

The puzzle Wolf needs to explain is that economic inequality is a standard left-wing issue, but in many countries the lower middle and working classes are now moving to the right. Wolf did raise this question briefly, but dismissed it in one paragraph; even in that paragraph he said little about the cultural divisions among workers, only mentioning Jeremy Corbyn’s The ineffectiveness of “old school socialism” in Britain. (He ignores the somewhat more successful experience of figures on the left like Bernie Sanders in the United States and Jean-Luc Mélenchon in France.) One figure Wolf uses shows that in Sweden, real incomes are flat or The share of households fell by only 20% between 2005 and 2014 (when the average across 25 developed countries was 65%), yet anti-immigration sentiment surged and ultimately helped the neo-Nazi far-right Sweden Democrats win elections. Great gains. It seems that culture, not economics, plays a major role here. (Jeremy Corbyn, born in 1949, served as leader of the British Labor Party from 2015 to 2020. Bernie Sanders, born in 1941, is a U.S. Senator from Vermont and an independent; Jean-Luc Ch.

If Wolff is willing to pursue this question, he must confront the salience of cultural issues.

First, Wolf repeatedly claims that the economic failures of contemporary capitalism, combined with the impunity of elite operators responsible for the devastating financial crisis of 2008, have caused workers to lose trust in the elites. But which elites? Right-wing demagogues are more opposed to liberal cultural elites than to financial elites; one of the first things they usually do when they come to power is reduce taxes on the rich and weaken business regulations, while chastising liberals for their treatment of minorities, Immigration and sexual “heretic” concessions. Of course, certainly not all socially conservative workers are driven by economic rage; many are less vocal about the abuses of market power and capitalist financial manipulation that Wolf denounces. Based on fieldwork, sociologist Arlie Hochschild reported in her book Stranger In Their Own Land (2016) that poor white workers in Louisiana Ethnic and immigrant grievances extend beyond large petrochemical companies, which have poisoned their land for decades and contributed to high rates of cancer in their communities.

Second, if inequality and anger at an unfair rentier economy are the main sources of working-class anger, why do some workers rally around Donald Trump, Nigel Farage, Marine Le Under plutocrats like Marine Le Pen and Viktor Orbán? One must pay attention to the cultural appeal of their nationalist and anti-immigration slogans, as well as their crude way of attacking liberals directly. As Wolff himself points out, in the UK, those who were victims of Conservative austerity were tempted by the cultural appeal of the Brexit slogan to support the Conservatives. As I make clear in my new book , A World of Insecurity: Democratic Disenchantment In Rich and Poor Nations , it’s not just inequality, it’s economic and cultural insecurity. , causing worry and restlessness among workers, including middle-class workers. How the richest 1% accumulate wealth doesn't make them very uneasy. (Nigel Farage, born in 1964, was the leader of the far-right UK Independence Party and the Brexit Party. Marine Le Pen, born in 1968, was the chairman of the French far-right National Front party and ran for election three times. President. Viktor Orban, born in 1963, is the current Prime Minister of Hungary. - Translation Note)

Third, in many cases the right adopted (or cooperated with) welfare policies or social protection measures that supported workers, thus demoralizing the left. Many welfare policies are supported by far-right parties, such as the Alternative for Germany (AfD) in Germany and Le Pen's National Rally in France. The exception is the United States: Republicans oppose child aid policies enthusiastically supported by Poland's right-wing ruling party, the Law and Justice (PiS) party.

Fourth, the cultural narrative used by the right is more effective in influencing public opinion than the economic narrative of class politics used by the liberal left. The findings show that people tend to vastly overestimate the size of immigrant and minority populations, but vastly underestimate the extent of wealth inequality and the racial wealth gap. The spell of narratives of a cultural majority under siege and white nationalist conspiracy theories like the Great Replacement is difficult to break, fueling a toxic form of victimhood complex and status anxiety. cultural form. Social media worsens the overall situation. On social media, the right seems to have an advantage when it comes to spreading lies: the more shameless those lies are, the more likely they are to go viral (and the more social media companies can profit). Evidence shows that in the three months leading up to the 2016 US presidential election, false stories favoring Trump were shared about 30 million times on Facebook, while false stories favoring Hillary Clinton were shared about eight times. Millions of times.

How unions can act

The metaphor of the difficult marriage of capitalism and democracy is so dominant in Wolff's way of thinking that the solutions he proposes often sound like marriage counselor advice. He called for "the moral values ​​of duty, fairness, responsibility and decency" and urged that "members of the elite must serve as role models...for honesty rather than lies, restraint rather than greed, appealing to what Abraham Lincoln called 'the innate qualities of our nature'. Better angels' than fear and hatred." The limitations of moral suasion are obvious, especially in the context of collective conflicts in societies and polities that raise issues of bargaining, countervailing power, and even class struggle.

Strong unions are a visible form of collective resistance to rigged capitalism. Wolf acknowledged that the weakening of unions has had "tragic social and political consequences," but he did not follow through on how to reinvigorate unions and redefine their goals. He seems to support restrictions on international capital flows for macroeconomic reasons, but he fails to emphasize that those restrictions also reduce the asymmetric leverage of capital when capital may flow elsewhere, thereby increasing the bargaining power of workers. (Rodrik noted this asymmetry in the early literature on globalization.) There are also strong calls to reform U.S. labor law to expand union activity to the industry level rather than the enterprise level.

The aims and functions of trade unions also need to be broader. We have strong evidence from the long experience of German works councils that having significantly more worker representatives in the leadership of large companies helps to increase productivity and establish trustworthy industrial relations without damaging profits. (Senator Elizabeth Warren was a leading proponent of this idea during her 2020 presidential primary campaign.) If workers have a significant say in company operations, they can influence company decisions. Outsource or relocate and transfer R&D investment from the current direction of labor substitution to the direction of labor absorption. A coalition of unions demanding a say in setting international trade and investment rules - which have so far been heavily influenced by corporate lobby groups - could dampen the anti-global fervor of ordinary workers.

Furthermore, trade unions can work with civil society groups to play a pivotal cultural role in shaping a shared citizenship, thereby playing a role well beyond the economic sphere. In the past, especially in Europe and Latin America, but also in the United States, unions played an important role in local cultural communities. The decline of unions has hollowed out a sense of shared meaning and identity within workers. Demagogues stepped into this cultural void with their racist, xenophobic culture war agenda. In a world rife with virulent disinformation and fake news, where social media amplifies anger and resentment and creates echo chambers of extremism, unions can work with other community organizations to provide guidance on public information services and indeed independent institutions. Proactive links to news provided.

The role that unions play in fostering democracy is part of a broader discussion of democratic institutions that operate outside government and markets, a discussion that Wolff has largely ignored.

The late Marxist sociologist Erik Olin Wright had an entire project he called "Real Utopias": concrete systems based on social change and the search for replacements for today's capitalism. A few claims about what is really possible to choose from. (As Wright points out, some examples already exist, from Wikipedia, to free and widely available open source technology, to Spain’s Mondragon federation of worker cooperatives.) In the first volume of this project, Associations and Democracy In the book Associations and Democracy (published in 1995), Joshua Cohen and Joel Rogers proposed the method of strengthening secondary associations, namely unions, works councils, community associations, Organizations such as parent-teacher groups and women's associations strengthen democracy by mediating between individual citizens and the state. (Joshua Cohen is a professor of political science at Stanford University. Joel Rogers is a professor at the University of Wisconsin-Madison School of Law. - Translation Note)

While Wolf did envision some fundamental national reform initiatives, including lottery decisions and a second legislative chamber aimed at informed democratic deliberation, had he more seriously engaged with the vast literature on the subject, his institutional Thinking will be greatly enriched.

Democracy is neither a necessary nor a sufficient condition for the development of capitalism

This book discusses similar weaknesses in innovation. Wolfe largely ignores features of other types of capitalism in which experimentation proceeds without abandoning democracy or compromising the economic dynamism of capitalism. Compared with capitalism in the United States, capitalism in Germany and Nordic countries is more worker-friendly and taxes high-income families more intensively, but according to some global innovation indices, they are not less innovative. It is also important to recognize different types of innovation. Some innovations are disruptive and challenge existing companies, as exemplified by private American innovators working with venture capitalists. (Here, Wolff invokes Joseph Schumpeter's theory of "creative destruction" and expresses an affirmative opinion.) Wolff fails to discuss other, less destructive, more incremental forms of innovation that, cumulatively, Such forms of innovation can bring significant benefits, and some large corporate organizations in Germany, Japan and South Korea are already excelling in this area.

Wolff points out that patents and copyrights inspire Schumpeterian innovation, but he also acknowledges that they can be tools of extortion or even an obstacle to further innovation. But he brushed aside other options. Wolf mentioned the suggestion of replacing patents with bounties, but there are also some compelling experiments in early market commitment for vaccine development. Another model is for the state to purchase private patents and place them in the public domain [as the French government purchased Louis Daguerre's photographic invention in 1839, a move that promoted the rapid development of photographic technology]. Overall, Wolf appears to support a cautious approach to industrial policy in developing “dynamic capabilities” but is wary of picking “winners.” But in many cases of initial exploration, not many companies will appear in a fledgling new industry. For example, in East Asia's industrial policy, companies are selected by the government, but when facing international competition, their short-term performance in the export market is often used as a means of restraint. (Louis Daguerre, born in 1787 and died in 1851, French artist and photographer. - Translation and Annotation)

On the issue of corporate concentration, Wolf rightly emphasized the need for aggressive antitrust policies, but his rationale was to enhance competition, efficiency, and growth rather than to strengthen labor power. Nor did he echo the escalating demands for big tech companies to repay the profits they reap from owning and controlling the vast amounts of personal data they collect on billions of users. The state is in a better position to negotiate with large technology companies than isolated private users; for example, the state may demand on its own behalf that a portion of the digital dividend be earmarked for public funds. Other proposals are also in the works. The city of Barcelona has launched a Citizen Data Trust so citizens can have a greater say in how data is collected and used. Andrea Nahler, leader of the German Social Democratic Party, supports the establishment of a national data trust with the goal of democratizing data capital. Wolfe did not touch on these claims.

Returning to culture, the overarching cultural issue of nationalism is treated too superficially in Wolfe's book. He mainly discusses ethnic nationalism, but other forms of nationalism that are less divisive and less toxic also exist, and we should not allow demagogues to take over the entire ground. As the world's largest democracies, the United States and India both have a history of civil nationalism based not on ethnicity but on liberal constitutional values, which include respecting the rights of minorities without sacrificing legitimate national pride. : Much like taking pride in a national football team while celebrating the diversity of its makeup. Institutions that foster these values ​​are vital to democracy. Jürgen Habermas similarly compared “constitutional patriotism” with the “blood and soil” patriotism that destroyed the world under Nazism. According to this, assimilation simply requires acceptance of the principles of the country's constitution. Such limited multiculturalism might assuage some of the usual complaints of ethno-nationalists about culturally misfit immigrants.

Finally, Wolff's analysis is limited in several ways by its narrow focus on high-income democracies. One might say that the happy marriage that democracy and capitalism enjoy in these countries is, so to speak, dependent on a large global servant class, and that this happiness sometimes comes at the expense of democracy and the prosperity of capitalism elsewhere. This fact should take some of the luster out of Wolff's gleeful statements, such as "Periods of global capitalism's boom are also periods of democratization." From a broader perspective, democracy is neither a necessary nor a sufficient condition for the development of capitalism. China's authoritarian capitalism shows that democracy is not a necessary condition; the fact that democracy did not particularly enhance the development of capitalism in India during its first four decades shows that it is not a sufficient condition.

Developing countries also provide ample evidence that the rise of anti-democratic populism can be independent of economic failure. Strong economic growth has not prevented the erosion of democracy in India, Turkey, Poland and Indonesia. Even when comparing different parts of a country, right-wing extremism does not thrive only in “backward” areas. In India, right-wing extremism is flourishing in fast-growing states such as Gujarat, Karnataka and Maharashtra; in Brazil, after more than thirteen years of Workers’ Party rule, economic inequality has declined significantly , but the Workers’ Party still lost to Jair Bolsonaro in 2018 and only barely won in 2022. [This phenomenon is significant in developed countries. Matteo Salvini's Northern League is the dominant party in Italy's economically developed regions. In addition, as an article in the Boston Review argued, from an electoral perspective, the most important part of Trump’s base voters live in some of the relatively affluent, rapidly diversifying suburbs where their status is most threatened, rather than in the abject poverty. Rural America. ] (Bolsonaro, born in 1955, served as President of Brazil from October 2018 to October 2022. - Translation annotation)

The explanation of all these facts could have been more culturally focused. More attention to developing countries where informal workers dominate the workforce might have prompted Wolf to recognize the need for policies like universal health insurance and universal basic income to build bridges between formal and informal workers. Such policies to enhance workers' bargaining power do not exist in the United States and India, where the labor movement is fragmented and weak. Wolf is too quick to dismiss UBI, but in my view UBI is an especially irresistible policy for poor countries.

Conclusion

So, in general, Wolf gives many insightful summaries about reform, following his eminently defensible motto "don't overdo it"; he also offers here and there some seemingly reasonable and even radical ideas suggestion. But he fails to propose an alternative architecture of viable institutional forms for democracy and capitalism. Reluctant exhortations aimed at achieving common citizenship are powerless in the face of the current crisis.