Time to Expand the Shrinking Circle

This diagram is my attempt to simplify the current state of the world. It maybe an oversimplification but let me explain.

In the inner circle are the character traits of what we might call liberal democracy (rational liberty, well-regulated markets, pursuit of truth, accountable government). This was the predominant order in Europe and North America in the post-war decades. Indeed, after the fall of the Berlin Wall, for a while it seemed where the whole world might be headed.

Not any more. Western triumphalism, then financial crisis, all combined with zero growth in the incomes of the many caused, at first, scepticism, and then anger. And not just outside Europe and America, but inside them as well.

Three forces, in the outer circle, are squeezing the inner circle. There is the populism of the left — seen at its most extreme in the meltdown of Venezuela — which blames business and globalisation for all ills, and reaches back to the mid-20th century for solutions.

Then there is the populism of the right — seen in places such as Hungary — where popularity is sought by pandering to prejudice, attacking immigration as an unmitigated bad and relentlessly blaming ‘the elites’ i.e. corporates, the arts, universities, and traditional political parties.

Finally, there is what I call ‘techno-exuberance’ — the view that wonderful new technologies (always presented as ‘intuitive’) are going to solve all our problems — mobile phones, biomedicine, driverless cars and AI among them. And some of the products are truly remarkable.

Sometimes the leaders of the companies that produce these clever products seek not just credit for their companies but also legacy by establishing well-endowed foundations. Yet simultaneously the companies are seen to show a reluctance to pay the tax they owe, though this tax would surely be a sum many times larger. Moreover some of these companies own (and are viewed as sometimes misusing) an extraordinary amount of data on each of us.

Of course, technology does offer tremendous potential benefits but surely we need to develop an ethical framework to govern these new fields so that the benefits are shared and people’s rights are protected.

As these three forces strengthen their grip, the inner circle will shrink unless…

Unless what?

Unless…

1)… we actively promote the virtues of liberal democracy

For too long people have simply assumed that the ingredients of liberal democracy are established and permanent and can therefore be taken for granted. So the case for them ceases to be made and, perhaps invisibly, they atrophy. New, apparently plausible, thinking emerges in the vacuum.

Examples include identity politics, which prioritises a specific identity (based, for example, on ethnicity, religion or sexuality) ahead of universal human rights. Or the well-meaning but misplaced desire to avoid making students feel ‘uncomfortable’ on campuses thus diminishing free speech.

The only answer is that the case for free speech, well-regulated markets, pursuit of truth, rule of law, transparency and democratic rights needs to be made vigorously, persistently and repeatedly. Protect and promote them. Do nothing and defeat beckons. If the values only get defended when they are already vanishing, it will be too late.

Goya’s wonderful etching, created in the late 1790s, as the ideals of the French Revolution ended in terror and dictatorship, vividly conveys the present danger; ‘The Sleep of Reason Produces Monsters.’ We need to make sure Reason stays awake!

The Sleep of Reason Produces Monsters

2) … governments deliver outcomes that citizens value

When an individual government makes promises and fails to deliver it breeds cynicism about that specific government. When successive governments, one after another, make promises and fail to deliver, it breeds cynicism about the political order as a whole.

Of course, no government succeeds with everything, but citizens do like to see basic competence, a sense of direction and the delivery of progress on major commitments. They rightly expect to be able to hold government to account for its overall performance. Patience is in short supply. In these circumstances, government effectiveness has become ever more central to ensuring faith in liberal democracy.

3) … the economy delivers rising living standards

The economy, with inevitable ups and downs in the short-term, needs to deliver rising living standards in the long-term. The benefits need to be spread across the social spectrum so that the vast majority of people believe that, over time, things will get steadily better and that their children will be able to do better in life than they did.

This has not been the case for the majority of Americans and many Europeans for more than a decade. In Russia, in the first decade after the collapse of communism, living standards fell by around half. For too many around the world the promise of social mobility has become a mirage. As a result, optimism has been drained, cynicism fostered and the search for simplistic solutions and scapegoats increased.

Turning this round should be a priority for every government.

4) … abuses of power, whether economic or political, are tackled

Too often, for example after the banking crisis a decade ago, those responsible for abuses of power seem to escape the consequences of their actions. They are seen as having not been held to account while the wider population bears the burden. Since ‘ordinary’ people are expected to follow the rules, they expect the rich, powerful and famous to do the same. If this doesn’t happen, it fuels a critique of detached elites.

This means regulators of sectors such as financial services, energy or telecoms need to understand deeply the perspective of the citizen/consumer, keep up with the pace of innovation, and be prepared to act boldly in the interests of efficiency and equity. In addition, they need to reward stewardship and long-term sustainability, not just short-term service and new products.

Governments, regulators and courts also need to have the courage to exercise impartially the powers they already have to challenge monopoly, abuses of power and rent-seeking while simultaneously promoting a broader, deeper, fairer vision of the future.

It is not totally straightforward to act on these four “Unless’es” but doing so is surely not off the charts of plausibility either.

Is it too hard to imagine the following steps being taken to deliver an expanding rather than a shrinking circle?

A judicious combination of:

• Modern technology, in a more advanced ethical framework than we have now, working for the benefit of everyone.

• The application across governments of evidence-based knowledge about how to deliver for citizens and therefore succeed, thus spreading faith in accountable government.

• Ever-improving education at all levels to foster social mobility and a more inclusive economy and democracy.

• Governments, regulators and courts courageous enough to break up monopolies and tackle egregious abuses of power.

Come to think of it, this is what Theodore Roosevelt’s Progressivism delivered for the US in the first decade of the 20th century.

Here is what he said about corporations, for example: “Our aim is not to do away with corporations; on the contrary, these big aggregations are an inevitable development of modern industrialism. … We are not hostile to them; we are merely determined that they should be so handled as to (serve) the public good. We draw the line against misconduct, not against wealth.”

And here is his view on accountable government: “The danger to American democracy lies not in the least in the concentration of administrative power in competent and accountable hands. It lies in the power insufficiently concentrated so that no one can be held accountable for its use.”

Eminently sensible words written in 1908 — and arguably more relevant today than ever before. The challenge now is for governments and leaders across the globe to act with similar vigour.