If one were to take seriously, Francis Fukuyama’s prediction that we have reached the end of history, it would be a rather positive world. Communism has been defeated, market liberalism and capitalism pervade every aspect of modern life, and with the modern information technology, people from all over the world are much more connected than they ever were in the past. Steve Jobs once told us in his commercials that we should think different, and it is certainly easier to do so in a Wikileaks world, where the powerful have a harder time in controlling relevant political information.
Politically, the most important accomplishment seems to be the spread of democratic regimes which is a rather marked development since the 1990s.
Source: Scott Arbeit
Global GDP has been massively expanding these last 200 years, which means that even the regular person in the developed world can afford tourism in different corners of the world. In the western world, we are also seeing much more Chinese tourists, which is an indication of the success of the economic opening reforms in what was once a thoroughly communist and backward country.
Who can, therefore, deny that politically and economically we are accomplishing the goals of human civilization of which our forebears could only dream of but never realize? However, I would like to caution my readers about inferring the future from past trends.
All of these advances can easily be challenged and undermined if the following trends are succeeding:
(1) climate change and resource constraint fuel political conflicts
(2) automation of work, immiserization of the population, rise of finance, rising inequality, permanent austerity and economic crisis
(3) war and conflicts resulting in unprecedented refugee waves to the developed world, xenophobia, right-wing extremism and surveillance state
Let us analyze briefly each of these factors. Based on my claim that these are serious problems that humanity has to face, I argue that democratic regimes are inherently challenged, that the democratic heyday belongs to the past, and that we are on a downward trajectory in democratic development unless we can counter these crises effectively.
(1) No one can deny that climate change is among the most serious problems facing humanity. One could argue that slavery may always exist. That one man can exploit another fellow man into eternity, and that there will not be any salvation or dramatic change. We might not expect that the working class will ever realize its historic responsibility to overthrow the capitalist economy, seize the means of production, and establish an economy based on social and individual needs rather than private property and profit.
But with the environment, the logic is somewhat different. If the environment is no longer habitable for us, we are screwed and will no longer exist. Period. We have maximally exploited the environment, and the Guardian is showing some interesting images on how much overpopulation and overconsumption contribute to the environmental and ecological crisis today. We all need our cars, our houses, our exotic food that is transported from thousands of miles away, using fossil fuels.
The more mouths there are to feed, the more food, clothing, housing, transport and so on we need to develop. That is no problem if we all still lived like the cavemen, just foraging, hunting and gathering, and using our bare hands rather than sophisticated machines to do much of the work for us. But we are producing more and more stuff with more sophisticated technology, and are burning fossil fuels, which are polluting the environment and trapping the greenhouse gases in the atmosphere, so it gets warmer.
The social consequences of a gradually warming planet have been understudied, and part of the reason is that what we are witnessing here is a rather dynamic process, whose outcome even we social scientists are too slow to observe and predict. But let us state some contours of what might happen. The physical effect of more children, old and disabled people dying from heatstrokes should be all too obvious, especially if they cannot afford air conditioning.
As the planet is getting warmer, agriculture will be heavily affected. Summer fruits like oranges need warmer climates to grow, so we might find it nice that we can now grow oranges in Alabama as well as in Florida. On the other hand, some basic staples like wheat only grow in temperate regions. So there will be great fear that some regions close to the equator will no longer be able to handle agriculture, thus robbing the people of one of the basic mainstays of survival.
The next step will be to flee the area from which they come from, and go to more moderate climates. Somalia comes to mind. This category of people are called the environmental refugees, and they don’t get the same attention that the war refugees are getting. But notice also that these two factors are linked together. The Pentagon admits that climate change aggravates political conflicts. If people don’t have access to food and water, they can easily forget being civilized, grab weapons, point it to the head of the few people who still own something, and blackmail them to surrender it. There is a rise of warlords, and a collapse of formal democratic decisionmaking.
Then there is the problem of resource constraints, which is intimately connected with population growth. We can reasonably argue that population growth is now less than it used to be thanks to urbanization, women’s rights and rising economic wealth. But even at a slowed down trajectory, I have not seen any demographic forecast, which does not say that the world population will reach 10 billion at some point during our century.
Don’t forget that it is not only the number of people that counts, but also the level of consumption per capita. In a world, where 15% of the world population belonged to the developed world (mostly white countries plus Japan) one could argue that it is not such a big problem if these people have a huge ecological footprint. Of course, there is environmental injustice when a few people pollute, and the people in the developing countries suffer the most, because they live in more exposed regions and lack the funds to protect themselves against environmental changes. But the overall human footprint is still smaller when a small fraction uses up a lot of resources.
The impact will be much greater as India and China, and now Africa and Latin America rightfully demand their fair share of global economic growth. We have already seen the rising importance of China, and its insatiable appetite for raw material from all over the world. By sucking in these resources, putting out manufacturing products and selling them all over the world, the Chinese are creating wealth in gigantic proportions, and no international company can any longer ignore the significance of the middle class consumer market in China (though there are, of course, issues with distribution of wealth).
Will the much deserved greater claim of China on world resources on top of what the already developed world claims impact the total availability of resources in the world? Absolutely. It is fascinating to look at one of the most popular consumer products in use today, which is the smartphone. In order to put together one smartphone it takes a countless amount of metals, which mostly come from China, though some of it still needs to be imported.
Zinc, silver and gold for instance are supposed to run out in roughly 15 years (prognosis from VisualCapitalist). Ironically, in the same prognosis, coal has the longest life expectancy (until 2136), but it also has among the worst environmental impacts, as the smog-filled residents of Chinese cities can tell all too well.
Some people might claim that we don’t need to worry about rare metals or other resources running out. We have been, for instance, hearing about peak oil the last forty years or so. Every time someone said that we are going to run out of oil soon, there has been a new discovery. Forty years ago, we did not have technology like fracking, where we drill down very deeply to get oil.
But we should be very careful about this strategy, because of the unintended effects like polluting the ground water, causing earthquakes and also the diminishing returns over time. We are enjoying a strange phase of low oil prices, because of peak supply. Yes, there are some oil reserves, which the Saudis are rather willing to share with the world, while it lasts. It is blowing a huge fiscal hole into their budget, but they are doing it to beat out market share with other countries like the US. A lot of politics, while we should not forget the underlying logistics of oil.
Resource constraint is a very serious issue, and we have long not seen the last of it. We should expect that there will be wars fought over rather basic inputs. That has been the case in the Middle East with reference to oil. This is a chronically unstable region, where the average human life counts for little, but the securing of oil counts for much. Oil is the key input to much of modern life, whether it is driving a car or using plastic. We cannot live without oil. The fact that all of the countries are not capable to realize a serious climate agreement and reduce CO2 emissions just reveals that our collective addiction for oil has not ended, and that we need to fight even more wars over it. War is a natural enemy to democracy.
I anticipate that we shall see more wars waged over water. The water scarce regions are in the central America, sub-Saharan Africa, the Middle East, South Asia and China. That is where a lot of people live, and it is the most important input, whether it is the daily water that we drink, the shower that we take, the cooling facilities in the factories, or the agricultural input.
(2) The second set of problems is related to the permanent economic crisis and technological boom. We are usually being told the Schumpeterian story of economic innovation, that the more new stuff is created using more efficient methods, the better our life is. That is reflected in the overall rising labor productivity trend.
Every time, when we developed new technology, people can consume more stuff with less labor, and the workers shift from one industry to another industry. It is certainly true that we no longer have to work in coal mines, factories or rice fields to the same extent that our ancestors used to. We have seen a shift from manufacturing to service sector employment, though the level of job protection and quality is much less than it used to be.
Even the service sector is threatened, because in Japan we see experiments with robotized nurses in old people’s homes, open online courses attempt to scale the university experience, and Google experiments with self-driving cars. What this means is that the few jobs, which still require human labor, will simply face more competition, which tends to lower wages and keeps unions weak. This might even result in slower innovation, because human labor is cheaply offered to employers. A bleak future with low productivity growth, low economic growth and a dearth of jobs awaits us in this scenario.
As the innovation, however, is moving apace, we should note that today we are a much richer society than we used to be in the past, yet for some reason the qualitative experience of the millenial generation (those born after 1980) is rather poor. There is first the trend that the millenial generation is less likely to purchase cars than their parents (Cortright 2015). The second trend is that millenials are more likely to live with their parents than their own parents did (Alter 2015).
Companies are crying alarm, and rightfully so. It was the pinnacle of consumerist capitalism that young people should be convinced to buy cars and houses, because that is an indicator of the economic advancement of society. What is the point of businesses to make investments and to hire people if the consumers of the future are unwilling to loosen their wallets?
Except that the millenial generation does not have much money left in the wallets. By creating the new social risk category of young people with irregular and insecure employment experiences, it is not surprising that young people simply lack the income to consume. I am certainly not a supporter of hedonistic consumption, but within the logic of a growth-driven capitalist economy it is impossible to not demand growth and still maintain social equilibrium.
The winners of innovation and technological advancement are, no doubt, the global oligarchy. By that I mean a handful of people, who use copyrights, patents and legal systems to protect their private claims on this huge wealth generation, which is really the biggest wealth transfer in our history, when we think of the Bill Gates in the world.
Apologists of capitalism may still seek to defend Bill Gates and people in his tribe, because he is partially responsible for the innovation. I cannot take this argument very seriously, because it is the joint creation of workers and their entrepreneurial bosses, which produces innovation, and the mid-level software engineers and the workers in the assembly line are certainly not paid off appropriately for their labor.
Before one goes on to praise the entrepreneurs like Louis XIV during his absolutist heyday, one should consider carefully the simple question whether it is possible for one person to earn billions and billions of dollars out of his own volition without the workers and consumers that have created the demand and supply of the product to begin with.
But let me admit that the Bill Gates of the world are not the worst creatures of contemporary capitalism. Even worse are the financiers, the Warren Buffetts and George Soros of the world. In the ideal economic system, financiers only have the role to funnel the savings of some people to the productive investments of another group. What is really happening is that productive investments are becoming a decreasingly important area for financial investments.
The vast majority of financial investment should rather be called financial speculation, where assets are bought and sold in the expectation that the value will increase. They have the fantastic effect of redistributing vast sums of money into the pockets of these financiers, whether they are managing a private equity firm or a hedge fund. What is worse is that the central banks have aided their speculative drive by lowering their interest rates to near zero, and supplying them with endless amounts of liquidity.
Needless to say, people, who don’t own major financial shares in companies, and workers, who fell victim to efficiency-enhancing job cuts and wage cuts, do not benefit much from the financial sector boom. Income inequality necessarily increases. James Galbraith (University of Texas 2014) writes “For countries very high in the world income scale, as you get richer you get more unequal. And that is because your economies shift toward being dominated by finance, by banks, by technology firms, and in some cases by oil and energy firms. And when you have growth, these industries are already at the top so they get richer relatively and the inequality increases.”
Even apologists of entrepreneurial capitalism can no longer deny that contemporary capitalism and the contemporary growth of wealth and income inequality is largely driven by a rapacious finance-driven growth model, the increase of private, public and corporate debt, which creates no additional value in the economy but fixes debt peonage and slavery for the workers, consumers and taxpayers of the world (financiers and corporations, who shelter their income in tax havens are not even the primary taxpayers here).
Galbraith claims that technology is not the main cause of rising inequality, while I think that there are multiple reasons why inequality is increasing, and technology is just one of them. Financial capitalism is another major cause.
But let me go back to the main question that I posed in this post: what is the effect of rising inequality, precarious employment and debt-based low economic growth on democracy? For one, we can see that the macroeconomic policy tools for governments is not as far-reaching as it used to be. We no longer have any cross-national capital controls. The lack of national regulation allows wealthy players to pick their favorite countries to park their money untaxed. If there were such a thing as global democracy, some of these assets would be taxed and redistributed, so everyone benefits. But where is this global government?
The increasing wealth of the global oligarchy also means that their means to control the political system are also enhanced. Pericles, the leader of Athenian democracy, said in his funeral speech that democracy means that the administration of the state is in the hands of the whole of the people, and not the few. But if income inequality is rapidly increasing within countries, then it is rather untenable to maintain a democratic system. Even Aristotle realized that, and said that in order to maintain a stable political system, any society needs a strong middle class.
What the ancient Greeks are telling us is that growing wealth and income inequality weakens democratic decision-making. The poor masses are not influential in politics and have to fend for their immediate survival. The collapsing middle class cannot form a counter-balance to the influence-peddling of the rich. The rich become more suspicious of the envious masses, and they draw up their barriers to protect their wealth. They buy off the political system. Is it any surprise that barely any politician wants to openly increase taxes on the rich, and the “job creators”?
The unresponsiveness of our political leaders to the needs of working and middle class people is clearly revealed in the handling of the economic crisis. We know first of all, that there is a secular development toward economic stagnation, in brief, secular stagnation, which is based on a slowdown in population growth, the creation of credit bubbles in the housing sector, the slowdown of overall productivity growth, and the growth of inequality as the wealthy have a higher tendency to save than the poor (see Larry Summers discussion).
The tendency toward secular stagnation is frantically counteracted by higher inflation, rise in state and private debt and central bank purchase of bank liabilities (see my discussion of Streeck), each time followed by ever decreasing rates of satisfaction.
Logically, we should realize how foolish the hope of endless compound economic growth is. It is easier for a very small economy to grow than for a very large economy. Imagine a very uneducated society that begins to build schools to raise the human capital of the citizenry, so they can use those skills in the labor market at higher level of productivity, and another society with a fully developed educational system, where additional schooling has no or few marginal benefits. (Also see Harvey’s 2010 skepticism of endless compound growth.)
Now that we have established secular stagnation as a reality of life, we should reflect briefly on what government policymakers have done to respond to the crisis. Bank bailouts and economic austerity are the only permissible medicine, which is more acutely the case in Europe than in the US, costing more jobs and livelihoods. Greece is perhaps the most dramatic example of the mishandling of the economic crisis.
Below you can see the image of a crying pensioner in Greece, Giorgos Chatzifotiadis. He tried to withdraw money from his pension check, and was denied each time. He decided to block the entrance to the bank and sob in despair. The police, which ironically protects private capital rather than pension rights, drags him out.
His fate is not the only fate. We have to realize that in the neoliberal present, any social rights that the working class has fought for over the last decades are put into question. The dramatic deterioration in the fiscal balance in Greece following the spike of government bond interest rates resulted in elevated rates (punitive rates!) of taxation for the working class, cutbacks in health, pension, education and social spending, and a flight of the capital of the rich, who can escape the taxman anytime.
Austerity is sold to the people as a panacea to restore international competitiveness, but after the x-th time of implementing it, failing to restore economic growth and lowering public debt, we know that there is a different agenda in the minds of policymakers: the simple redistribution of wealth into the hands of the rich. The fact that all centrist political parties accept the banker narrative of the crisis and prescription means that people are becoming more and more disaffected from the regular democratic process.
(3) The last point I advance here is to link the permanent economic crisis together with climate change, resource scarcity, wars and political conflict. We know that there are long-running political conflicts that come from resource scarcity and the decreasing ability to operate agriculture in trouble regions like sub-Saharan Africa. We know that the most war torn region happens to be the Middle East, and it is hard to find a day when we don’t read about nasty killings and explosions in Afghanistan, Iraq or Syria.
Not surprisingly, we have seen a huge refugee wave, which has resulted in intense political discussions in Europe about how to halt this stream of refugees. The political optics of the situation cannot be uglier: at a time of massive austerity, people in Europe are being told that they should tolerate refugees, who inevitably need clothing and shelter financed by the state, which creates the perception of injustice.
In Austria, the government wants to shield the labor market from the refugees, because there is the old tradition of prioritizing employment for citizens, especially when the unemployment rate is elevated. But if the refugees are not allowed to work, then they will burden the welfare budgets, though I doubt that the burden is quite so heavy as right-wing policymakers claim.
But the optics is what matters in politics. Extreme right-wing forces are very much on the rise, and we need to only look at the recent elections in France (Front National) and Poland (Party of Law and Justice). Germany and Austria also have tremendous right-wing potential, even though the Nazi history makes those attempts rather muted. The FPO could gain much more power in Austria, and so does the AfD in Germany. Let us not forget Donald Trump in the US.
These are political forces, which still speak in the language of a democratic polity. But substantially, they would see no problem if a charismatic ruler were to put in place his policies with few constitutional restrictions. Whether it is banning the building of mosques or ridding the country of immigrants, these political objectives, which are somewhat popular among the frightened masses, would require quite dictatorial means to carry out. The losers are the defenders of civil liberties and democracy.
Some people say that my fears for an enlarging authoritarianism are overblown, and that from a world historical perspective, we never had so much freedom to disseminate our views so cheaply and so widely (e.g. this blog). But my view is that we already see indications of government clampdowns on civil liberties.
The famous examples are Edward Snowden, who revealed homeland security data, and Julian Assange, the founder of Wikileaks, the major platform to reveal government secrets. What happened to these two gentlemen? Snowden is hiding in asylum in Russia, because he happened to not offend the Russians, who are now at crosshair with the West because of Ukraine and Syria. Assange is hiding in the Ecuadorian embassy in London, even though he is facing extradition to Sweden for trumped up sexual harassment charges (which are linked to the US desire to have him extradited to the US to face prosecution). Snowden and Assange are the heroes, who show that the emperor wears no clothes and they are prosecuted by the US government.
One could now argue that few of us are as “heroic” as these two gentlemen, and that we commoners live a normal life without the permanent prosecution from our governments. But we need to think twice here. What Snowden and Assange have shown the world is that government surveillance is a major industry, which is growing by leaps and bounds. Every time there is another terrorist attack, whether it is 9/11 in New York or the Paris attacks recently, there is a new justification for each government to step up the wiretapping of phones, e-mails, bank accounts and other digital information portals.
The government tells us that in order to protect national security it is necessary for all of us to give up some of our privacy, because we don’t want to risk another terror attack, right? How ridiculous this argument is! If the government were serious in preventing future terror attacks, they would attempt all they can to stop adding fuel to conflicts in the Middle East. They would give their youngsters in their own countries real job and educational opportunities rather than let them lie idle, and become receptive to extremist influences of any stripe.
So if we know that our governments are not really interested in preserving national security, why is this expensive security apparatus to monitor the population necessary in the first place? Loic Wacquant (2001) noted in his research that the reason why more Americans are put into prison, and why more Europeans face welfare retrenchment and workfare activation schemes, is that these measures are a way to manage social insecurity in a neoliberal political economy.
This account makes perfect sense. We don’t have anything productive to do for the working masses, so we increase monitoring over them, because things will have to go wrong, right? Under communism, everyone was roughly equally poor, so the crime rate was negligible. In a flourishing capitalist society, crime rates are higher, as there will be crimes of envy, but we don’t expect that much crime, because everyone has a good life. In decadent capitalist society, we expect even more crime, because the poor need to steal to survive.
Ironically, the historical crime data cannot bear out this hypothesis. Steven Pinker (2011) argued that historically there is less violence, because of the civilizing force of the central state, literacy, education and commerce. I have not engaged his thesis deeply enough to question it, but I will note that as the neoliberal economy has taken hold, people are not tending toward more crime, yet the penal state thinks that we have to be prevented from getting crazy ideas via constant surveillance.
Part of the effort of surveillance comes from the technical capacity to do so. It is harder to intercept the content of letters or face-to-face conversations than phone calls or e-mails. Another part comes from managing the social insecurity rather than taking steps to solve the root problem.
Governments tend to say that all safety measures are taken to prevent terrorist activity, but if we look at the various police clampdowns from the Seattle (WTO) protests to the Arab Spring to Occupy Wall Street to Ferguson, Missouri and lately Paris after the terror attacks, we can see that it is the goal of the states to maintain social order, or social disorder to be more precise. We may consider the police batons and the tear gas as attempts to preserve the social disorder of the status quo. Yes, neoliberalism is bad for your health, bad for the environment, bad for your wallet, but it is better for you to shut up and accept it than to rock the boat. Below you can see an image of police getting ready to greet Black Lives Matter protesters in Minneapolis, Minnesota.
Source: Getty Images
In conclusion, it appears that while democracy is a very worthwhile social endeavor, which humans have worked very hard to accomplish, it is difficult to imagine how it can be sustained over the long term given the external challenges that we are facing. Democracy is a luxury good, and not a basic pillar of life.
In the past, we did not have many forms of democracy, as the ruling classes throughout history have convinced us that in a world where life is solitary, poor, brutish, nasty and short, we cannot afford the luxury of a democratic polity. We were being told that we need to unite behind a leader, who in peace times ensures that our grain storage works the way it should, and in times of war, ensures that we unite against a common foreign enemy. Even if we were not sympathetic to these notions, we lacked the literacy and education to question this paradigm.
All of that appears to be a joke to us today, but given the rise of right-wing populists and demagogues in the developed world, the conjuring up of real and imagined enemies (e,g, ISIS), the building up of a surveillance state, the permanent austerity and economic crisis, the resource constraint, the climate catastrophe, and the refugee wave, we can no longer say with the same confidence that democracy can weather the storms ahead.
In times of crisis, the demand for a strongman, who promises easy solutions to complex problems, will overpower the voices of reason. Democracy will be considered a nuisance, because it is too slow or too inflexible to respond to grave crises with the urgency that is required. The Roman Republic drifted into the Principate, the French Revolution drifted into Napoleon’s monarchy, the Russian and Chinese Revolution drifted into the dictatorship over the proletariat, and the German Weimar Republic drifted into Nazi dictatorship.
We know that history usually does not repeat itself, but it does recur with certain patterns that are beyond our choosing.