May 4, 2021

Democracy is Floundering: We Need to Fix it or Lose it

The world may turn bleak without good governance. “A new dark age could descend in some regions where tyrants abuse their subjects and where jihadists or criminal gangs roam freely to terrorise dispossessed populations.” Or so say Nathan Gardels and Nicolas Berggruen in “Renovating Democracy.”

Nicolas Berggruen and Nathan Gardels
Nicolas Berggruen and Nathan Gardels

THE WORLD may turn bleak without good governance. “A new dark age could descend in some regions where tyrants abuse their subjects and where jihadists or criminal gangs roam freely to terrorise dispossessed populations.” Or so say Nathan Gardels and Nicolas Berggruen in “Renovating Democracy.”

The book is a romp through all that’s going wrong with politics, from populists on the rise, robots stealing jobs, climate change being ignored and technocrats bereft of fresh ideas. Helpfully, the pair focus on solutions, from “universal basic capital” (financial support from the state so people invest) to finding common ground between China and America to ensure stability. Without this accord, they foresee “swaths of pandemonium” that “surround gated outposts that are linked to one another but [are] divorced from their planetary hinterland in a kind of global apartheid system.”

It’s sobering stuff, and from an unlikely source. Mr Berggruen is a billionaire investor who has parlayed his wealth into a foundation, the Berggruen Institute, that supports good governance and big ideas. Mr Gardels is a co-founder of the institute and the editor of its media offshoot, The WorldPost. The Economist’s Open Future initiative questioned the authors in a short interview. It is followed by an excerpt from the book, on relations between China and America.

* * *

The Economist: You argue that we need to "renovate democracy." But another way to see things is that democracy is working just fine, it’s just that the outcomes don't appeal to comfortable cosmopolitans... What makes you convinced that democracy is broken?

Nathan Gardels and Nicolas Berggruen: Well, what we are seeing is the result of elections. But democracy is as much about what happens outside the ballot box: impartial rules, practices, institutions—and political culture—that are not only inclusive, but that foster the reasoned discourse, negotiation and compromise necessary to reach a governing consensus in diverse societies.

In recent decades this system has decayed. The mainstream political parties were captured by the organised special interests of an insider establishment that failed to address the dislocations of globalisation and disruptions of rapid technological change. This led to a deep distrust of governing institutions by all those left behind. Such disaffection gained more traction than ever before because of the participatory power of social media.

When an unresponsive elite forsakes the average citizen in a system legitimated by popular sovereignty—and fortified by social media—demagogues who fashion themselves as tribunes of the people ride the rage to power. Thus the Brexiteers and Trump.

The danger now is that the fevered populists are throwing the baby out with the bathwater, assaulting the very norms and institutional checks and balances that guarantee the enduring survival of republics. The revolt against a moribund political class has transmuted into a revolt against governance itself. The result is protracted polarisation and paralysis.

The chief challenge now is not for partisans to put their teams back in power through elections, but to mend the breach of distrust between the institutions of self-government and the public. This can be done by integrating social networks and more direct democracy into the system. It needs to be “mediated” by new, deliberative practices that complement representative government and compensate for its waning legitimacy. In our book we call this “participation without populism.”

To take but one example, if such a platform for citizen’s deliberation linked to a public vote had been in place before the Brexit referendum, all the consequences we now know would have been aired and the outcome would have been different.

The Economist: Among your solutions to the problems of wealth inequality is a scheme for people to own an equity stake in the robots that will run tomorrow's economy. How would that work?

Messrs Gardels and Berggruen: The point here is that, as digital capitalism divorces employment and income from productivity growth and wealth creation, making a living through gainful work will diminish. The best way to address inequality then is to spread the equity around by fostering an ownership share by all in companies where productivity growth is driven by intelligent machines that displace jobs. The aim is to enhance the skills and assets of the less well off in the first place—that is, “pre-distribution”—instead of only redistributing the wealth of others after the fact. We call this universal basic capital in the book.

This can be done in a conventional way through savings accounts in which all participate who are invested in mutual-fund-type instruments. “Platform cooperatives” are another way: for example, everyone in a neighborhood could own a piece of ride-sharing services that operate there, or those who share their personal medical data would get a royalty payment from pharmaceutical inventions based on that data. The public could be assigned equity shares of any IPO by companies that benefited from publicly funded R&D. Another way, as California Governor Gavin Newsom has proposed, is a “data dividend” for the use of your personal data by big tech.

The Economist: You call for a pact between America and China to ensure global order. What is the role of Europe in this world? Will Africa and Latin America need to "choose sides," so to speak?

Gardels and Berggruen: The return of China to centre stage, not least through its Belt and Road initiative that will revitalise Eurasia, shifts the centre of gravity of the world order eastward. To maintain a civilisational presence in this new constellation, the bond between America and Europe is more important than ever. In a way, China’s rise forges a new common identity for the West.

At the same time, within this common identity, Europe’s social model can soften the harsher edges of America’s free-for-all market mentality. For example, it has already done so on digital privacy and leading the way on “flexicurity” policies, as some Nordic nations have, that protect workers instead of jobs through universal social benefits not linked to employment.

If things are left to float as they presently are, Latin America, and Africa in particular, will have to choose. But there is an alternative. Instead of flatly rejecting China’s Belt and Road project like Stalin did the Marshall Plan, the West could join it and thereby ensure more transparency and debt sustainability. Further, Europe in particular, could complement China’s hard infrastructure investments in Africa with soft-infrastructure investment in health, education and good governance. This would not only mitigate the need to choose sides, but also stem the growing flow of migration northward from the Africa continent.

The Economist: You write: "A new dark age could descend in some regions where tyrants abuse their subjects and where jihadists or criminal gangs roam freely to terrorize dispossessed populations." The alternative is a strongman to restore order. How can we realistically find a democratic solution?

Gardels and Berggruen: Such forces arise when there is a vacuum of power and authority. The refugee and immigration crisis emanating from Central America, for example, is not the result of strong states persecuting their citizens, but of weak states that can’t protect them.

In this respect, the Western military interventions and misguided attempts to “nation-build” other’s nations, for example in Libya and Iraq, have worsened the situation. ISIS arose in such a vacuum.

To fill the vacuum, first comes security, the rule of law, sound governance and development. Then comes democracy, which can only organically emerge out of those conditions. Change will only take hold if made by those who own it. To put the cart of democracy defined by the pro-forma exercise of elections before the horse does not work. It inevitably deepens the divisions in society instead of repairing them.

The Economist: Many problems you identify are about managing pluralism. The world is pressed together like never before, and perhaps we've globalised quicker than our mindsets could adapt. Is there a solution to the tribalism, which is influencing our politics?

Gardels and Berggruen: It is no surprise that those left behind by the enormous and rapid changes of recent years are seized by anxiety and the sense they’ve lost control over their destiny to distant institutions run by strangers.

While economic globalisation and technology have moved the world toward convergence of unprecedented scope and at a swift clip, the cultural and political imagination engenders the opposite. It creates a search for shelter within the familiar ways of life, that register a dignity of recognition among one’s own kind and constitute identity against the swell of seemingly anonymous forces. When people retreat into their own suffering, better angels lose their wings. Then politics becomes tribal: us versus them.

Tribalism will only diminish to the extent the excluded recover a meaningful role in owning their future. Above all, that means renovating the practices and institutions of democratic deliberation so they are genuinely inclusive instead of captured by organised, special interests or demagogues who play on emotions without delivering the goods.

* * *

This article was originally published in The Economist