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Western-style representative democracy is an 18th-century invention that spread worldwide in the latter half of the 20th Century. But with growing disillusionment, rising populism, and unsustainable welfare commitments, some contend that it is ill-equipped to handle the challenges of the 21st. Indeed, the key advantage of democracy, that it could aggregate the diverse views of many, may have reached its limits under the current design.
The Enclosure of Power
In a prior essay, I walked through a very brief history of how modern democracy emerged beginning in the late Middle Ages. I argued that democracy arose both as a result of and as a contributor to, human progress. Democratic systems were able to aggregate the will, wishes, and viewpoints of a greater diversity of voices, and this cognitive diversity translated into better policymaking. What arose was a synergistic feedback loop where new human capabilities spawned new voices and vice versa. I noted, nonetheless, that democracy, as originally envisioned in ancient Athens, was completely distinct from its modern counterpart in one key respect: representation.
In Athens, representation was achieved via sortition, where regular people were randomly selected for the various legislative councils. The people could deliberate directly, set the agenda, draft policies, and pass them. Modern democratic systems have eschewed direct democracy, giving the people a voice only through a single vote for representatives during periodic elections. This “indirect” form of democracy arose out of Enlightenment concepts of legitimacy and the social contract; the rulers have the right to rule but only with the consent of the governed. The people were not to be trusted to rule themselves.
In her book, Open Democracy, author Helene Landemore argues that indirect democratic systems can promote what she calls an “enclosure of power” around elected elites. Elections are not selecting the best or most representative candidates, but instead, those candidates that are most adept at playing the election game. Physical appearance, oration skills, fundraising capability…etc, and other factors can matter more than policies and platforms do. While representative rule is more diverse and effective than rule by Kings, Queens, and Nobles, Landemore argues that modern democracies are better defined as “elected oligarchies,” not true democracy.
While I wouldn’t go this far myself, Landemore has a point. Few people in America, for instance, whatever their political inclinations, would deny feeling that the elites in Washington are out of touch with the lives of everyday Americans. Additionally, in the 21st Century, we now know that cognitive diversity is required for optimal decision-making. A diverse and truly representative leadership should reflect the demos (people), but it does not. Instead, Congress is disproportionately skewed toward wealthy, older individuals, with a full 1/3rd of them lawyers; hardly a mirror of society.
In addition, fundraising, a “necessary evil” of running for elected office, creates many opportunities for rent-seeking. A study by Martin Gilens and Benjamin Page, published in the Cambridge University Press, found that policymaking tended to favor economic elites; regular Americans have a voice, but the voice of the top 10 percent wealthiest is often the deciding factor in whether or not a policy gets adopted. Campaigning, fundraising, and lobbying are probably the core pathways through which the wealthy influence democracy.
Perhaps this is not a problem. Democracy only promises the people a voice and we certainly do not want a “tyranny of the majority.” But it can become a problem, as I discussed in my essays on taxation, if the political machines become a vehicle for systemic rent-seeking. Money flows to where its return on investment is highest. To the extent that elites find that “buying” the support of representatives is the easiest path to growing their wealth, they will use their wealth to influence legislation and regulation to work in their favor.
This could transform the economic system from an inclusive one, where the creative destruction of the market allows for winners and losers, to one that is extractive. An extractive regime serves only the interests of incumbent elites who grow ever wealthier by siphoning a larger slice of the pie to themselves. An extractive economy will tend to depress innovation because money will flow toward lobbyists instead of engineers, scientists, and entrepreneurs who would have grown the total size of the pie.
The Rise of the Vetocracy
The “enclosure of power” might not have been such a problem had it not also come with the rise of what Francis Fukuyama calls the “vetocracy.” That is, the steady growth of powerful and entrenched interests within that “enclosure” that have de-facto veto power and every reason to use it. This is more acute in some democracies than others. The United States is particularly vulnerable because it chose to vest democratic legitimacy in two branches of government rather than one; Congress and the Presidency. This “Presidential” system is also commonly found in South America.
In the United States, power is split among arms of government that all have very different motivations. House Representatives have two-year election cycles and narrower (and often gerrymandered) constituencies. Senators are elected every six years by residents of their state, but the Filibuster rule blocks much legislation from getting a vote. The President is elected every four years by the nation at large, through the Electoral College can toss the election toward the less popular candidate. The courts may strike down and modify law through interpretation, to say nothing of the complex labyrinth of alphabet soup-named Federal government departments or the various parallel state-level departments.
By design, the Framers of the American system created a series of checks and balances intended to limit the power of government, but in doing so, they may have inadvertently created a system that can become so inflexible it could eventually paralyze itself through inaction. There are simply too many veto points to block good ideas from being realized and too much incentive for elected officials to do so.
This is especially true in America’s plurality voting system with “winner take all” representation. As opposed to a proportional system where many parties will earn seats in Parliament, plurality voting often results in two dominant parties that lock themselves in a zero-sum battle for power. Inevitably, the outcome of almost every election leaves about half of the population disenchanted and possibly angry. It also makes politics more about personalities than it does parties or platforms, giving candidates every incentive to stoke the “base” with inflammatory remarks that motivate the extreme fringes of society.
As
notes in From Poverty to Progress, candidates are increasingly distinguishing themselves through ideological purity, whatever it may be. In the end, all extremist ideologies hold that only good ideas come from their group and those that come from outside their group are not just wrong, but also immoral. When the political system becomes overtaken by ideology, lawmakers can no longer work with each other, compromise, or debate. The result is polarization and paralysis. The checks and balances become a straightjacket that results in endless gridlock. This gridlock tends to favor the aforementioned economic elites.Gridlock, paralysis, and political grandstanding in Congress have gradually damaged the legitimacy and function of the state beneath it. Take the National Environmental Policy Act (NEPA), for instance. As I discussed here, what was a well-meaning law intended to protect the environment has become a tool that now blocks green energy projects. This problem is well known but the two dominant parties have little incentive to act. The Democratic Party finds these endless lawsuits useful for “green” activists and trial attorneys. Meanwhile, the GOP is hardly motivated to fix the system, because paralysis protects the incumbent fossil fuel industry and helps justify continued distrust and dislike of government among its base.
Institutional rot has led to a government where functions appear increasingly detached from reality and common sense. The Pentagon, for example, is required by Congress to publish over 500 (often duplicative) reports every year. Yet, as of 2023, it has consistently failed audits and fully half of its assets cannot be accounted for. Francis Fukuyama notes that Congress has created 51 separate programs for worker retraining, 82 to improve teacher quality, and dozens of anti-poverty programs with benefits “cliffs” that perversely trap and keep its recipient’s poor. Nuanced debate and discussion have become replaced with 10-second soundbites and three-word slogans, from “Build the Wall” to “Defund the Police.”
Have we stumbled our way into Colin Crouch’s “post-democracy?” Sure, the elements of democracy still function, we have regular elections (for now), separation of powers, free media…etc, but has the spirit of democracy been hollowed out? This is a hard question to answer.
Populism
Institutional rot, detachment, and the vetocracy have made it very difficult for the political machines in Washington to function effectively; Americans intuitively sense this. The longer this goes on, the more the people clamor for a “strongman” who will cut through the bull****. Today, many Americans appear ready and willing to welcome a dictator, unbothered by candidates who have openly called to “terminate” the Constitution itself. Ironically, it could be argued, that the Framer’s fear of a strong executive, which led to the creation of a Presidential system and division of democratic legitimacy, actually laid the groundwork for an unusually strong executive in the United States.
The quickest path to Presidential support is via populism; to play the common people against “evil” or “corrupt” elites and give the most ardent supporters (those who will show up at a primary) what they want; even if it’s illegal or bad for them in the long term. A case in point here is Argentina, an emerging economic success story of the late 19th and early 20th Centuries. At one point, Argentina was wealthier and more developed than most countries in Western Europe. Like the United States, Argentina adopted a Presidential system of government that pitted the executive against the legislature. From the 1940s onward, largely beginning with President Juan Peron, Argentina has found itself bouncing from one bad policy to another which has led to endless cycles of growth, inflation, currency devaluation, and collapse.
The cycles began with Peron’s populist push for “import substitution,” that is, using tariffs, import quotas, subsidies, and other measures to force goods to be manufactured domestically. The justification for import substitution is as old as time, to “protect local jobs” and “wages.” The policies were understandably very popular with the working class, earning Peron easy reelection votes. But by definition, a bad habit brings short-term pleasure and long-term pain; the policies of import substitution were just that. I discussed some of the problems with tariffs here.
The morass of subsidies and taxes required to force domestic production created immense inefficiencies in the economy that could only be masked by heavy government debt. When that debt load grew too large, the government had to print more money to pay it, devaluing the currency. Ultimately, this led to economic stagnation which encouraged yet more populist policies. Rinse and repeat this over nearly a century, and Argentina finds itself the penultimate example of how not to run a country.
If the above sounds a bit familiar, it’s because the United States risks falling into a similar cycle. The Trump campaign and Presidency were built upon populist policies that were popular with its most radical members. It promised closed borders, high protective tariffs, and trade wars all around; all great for obtaining votes in the short term, but known to be harmful in the long term. Then, when he lost the 2020 election, Trump did the unthinkable; he subverted the peaceful transition of power and attempted to remain in office. Most worryingly, his party largely stood by him as he called for a termination of the Constitution itself. If this is not a sign of a lack of confidence in American democracy, I don’t know what is.
While democracy’s demise has been erroneously forecast many times before, there is no doubt that the challenges we now face are uniquely significant. In the last century, democratic governments undertook unsustainable welfare commitments and now face slowing economic growth and depopulation as they attempt to finance them. Throw in climate change, a global pandemic from which the world is still convulsing, and the debt load of the 2008 financial crisis, and it’s easy to see why many are disenchanted and gloomy.
One thing is certain though, a populist strongman will only make matters worse. Democracy has, for the most part, served us well. Perhaps it is time for a tune-up or rethinking of how we approach democracy instead of tossing it out entirely. This is the subject I will explore in future essays at Risk & Progress.
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"the key advantage of democracy, that it could aggregate the diverse views of many" strongly doubt that is the key. seems a fashion/view of it from echos of the technocratic and suffrage movements, which are more recent and subsequent to defeat of most the other previous government forms.
many other better claims to key improvements out there than that.
the secret is not surveys and design by committee, as much as the soviets wished it were.
Great read! I recently did an analysis on this topic as well.
Would love your thoughts!
https://open.substack.com/pub/matthewharris/p/the-future-of-the-world-system?r=298d1j&utm_medium=ios