Liberal Democracy as a Dictatorship of Minorities

 Making sense of the direction of the evolution of societies has always been a challenge among philosophers and social scientists alike. Before tackling the subject of liberal democracy, viewed here as a dictatorship of minorities, it is fair to say that so far, we do not possess a clear understanding of where societies are heading. 

In the 19th century, German philosopher Hegel proclaimed the "end of history". Closer to our time, Francis Fukuyama announced his own "end of history", which he believed to be characterized by the worldwide triumph of liberal democracy .

Although after 1989 the number of democracies surpassed other types of political systems (authoritarian, communist) for the first time in history, the fact is that today the majority of them are not liberal, but electoral democracies, as Dani Rodrik has pointed out in a recent study.

For any democracy - whether liberal or electoral - to function, however, a compromise between its players should be reached, that protects the rights of minorities, as well as those of the majority.

As opposed to electoral democracies, which are biased towards protecting the political rights of the majority of their citizens, liberal democracies are biased towards protecting and enlarging the rights of minorities within a given society. 

Rare as they are, liberal democracies appeared in the West in a specific context in which the owners of capital - or "the rich" - had succeeded in gaining or retaining political power with the support of a limited number of voters. Thus in 19th century France, after 2 revolutions (1789 and 1830) only citizens who earned a certain amount of money were allowed to vote. They made up about 1 percent of the country's population. The rest of the citizens, as advised by prime minister Guizot at the time, had "to get rich first" if they wanted to participate in the political life of the country. 

By restricting the right to vote through a variety of methods, the nascent elites of Western liberal democracies were thus able to deny political rights to the many for a long time, as well as to avoid any responsibility for the social havoc that capitalist development played during the first century or so of its existence.

Gradually, especially after the first world war, liberal elites were forced to concede voting rights and participation in political decisionmaking to the majority of the population, including women.

For a few decades after the second world war, the balance of power inside most Western nations shifted in favour of majorities, whose working and living conditions improved dramatically. Politicians representing voter majorities were then able to impose heavy taxes on the profits of the rich, sometimes as high as 90 percent, where there were none at the beginning of the 20th century.

The rich minorities' reaction was slow in coming but, through its consequences, it had devastating effects on the living standards of the majority of voters in Western nations. Through the adoption and promotion of neoliberal economic policies pioneered by Margaret Thatcher in the UK and Ronald Reagan in the US, the "1 percent" minority in society were able to reverse earlier policies of high taxation and, during the following decades, to diminish taxes back to levels unseen since the early 1900s.

It is fair to say at this point that if such a trend continues unchecked, Western business elites will end up paying no tax at all.
To achieve such an objective, the rich minority employed a variety of electoral tactics as well. First and foremost, they coopted all the leaders of mainstream (or majority) political parties and turned them against their own constituents (Clinton and Blair are the first to spring to mind here).

Second, they have all but destroyed the trade union movement in the West, which was the backbone of the political parties of the left and instrumental in obtaining favourable compensation for labour from the owners of capital.

The third and most peculiar way of advancing the political agenda of the rich minority has been by joining forces with leaders of other minorities, who had hitherto faced discrimination by majorities. Think here the LGBT community, some albeit not all ethnic minorities, and women.

If towards the end of the 20th century the rich minority exercised its control and promoted its agenda via the outright purchase of mainstream politicians on both sides of the political isle, over the last decades we observe a tendency to promote to power leaders who are either childless (think here Merkel or Juncker); who belong to the LGBT community (like in Serbia or Luxemburg); members of the billionnaire elite (Berlusconi, Trump); or selected members of ethnic minorities. Together, these minorities can display signs of becoming quite dictatorial when their agenda is challenged by majorities, prompting some to call this phase in the evolution of liberal democracies "totalitarian capitalism".

In hindsight, it should be admitted that majoritary democracies have historically been less than tolerant of the rich or the LGBT minority. Until a few decades ago, homosexuality was shunned in most Western countries and on occasion, its members were under threat of being prosecuted and imprisoned. Similarly, the heavy burden of taxation imposed on the rich minority during the '50s, 60s and 70s could be construed as more of a penalty of being wealthy than as a truly fair level of taxation. No wonder such policies bonded the members of these minorities together and determined them to use any means at their disposal - primarily money - to keep majorities in check and out of power.

The fight between these minorities and the majority has now spilled out into the streets, as the main institutions in our democracies, including parliaments, have ceased to work as they were supposed to. Far from liberal democracy  becoming the norm in the world, what we are witnessing these days is the withering away of established liberal democracies. Even in the West, the latter  are being replaced, one after the other, by electoral democracies catering to the rights of the majority. Repeatedly labeled "populists" or "illiberal" , the new breed of politicians spearheading this movement is here to stay and to expand both influence and power.

This time around as society evolves however, majorities should strike the right balance. As they restart making gains in prominence and power, they should avoid imposing punitive taxation levels on the rich, or promote anti-LGBT legislation, cater to racists and so on. After all, the rise of the neoliberal breed of leaders was a consequence of the errors made in the past by the politicians representing the majority of voters in Western societies.

The onset of a social tsunami

 June 17, 2010

Most of us over forty remember how it all started. The first neoliberal victories won by Margaret Thatcher in Britain led to the near collapse of the British trade union movement. The victory against Soviet-style communism and the fall of the Berlin Wall have led to ten years of economic euphoria in the West, resulting from the opening up of the Central and Eastern European markets. Unexpectedly, neoliberalism’s main economic tenets came undone during the first decade of the new century.

By way of analogy, the current sovereign debt crisis in Europe could safely be regarded as neoliberalism’s very own Stalingrad. Even before the 2007 financial crisis, the flawed logic of supply-side economists started to produce negative social results. Yes, profits accumulated for a while, but these only to a handful. True, most products became cheaper as a result of moving entire industries to former Soviet countries or to China. Lower taxes did initially benefit consumers, but provoked a dearth of social services, investment in infrastructure, hospitals and schools. After thirty years of neoliberalism, most people find themselves poorer and their children less educated than generations of the previous fifty years.

According to neoliberal theorists, economic growth, lower taxes and free trade would eventually trickle down prosperity to all. Instead, they have given rise to an ‘investing class’ who used the profits accumulated in their accounts in unproductive, i.e. speculative ways. This led to a series of bubbles – the dot.com bubble, the Japanese real estate bubble, the US sub-prime bubble – that ultimately culminated in the global financial crisis, similar in proportion if not in outcome to the one in 1929.

The situation created after 2007 led to the counter-offensive of states against mindless speculative activities, deregulation of financial markets and neoliberal economic philosophy. The latter, had it been applied in full, would have led to the withering away of states altogether. In other words, what Marxists were dreaming of doing, neoliberal societies very nearly achieved.

The counter-offensive of political administrations against neoliberalism has shaken the very foundations of the Washington consensus. Increasingly, Western politicians, industrialists and trade union bosses are talking about the opportunity of adopting a new development model, the Beijing consensus, in which state-led investment for major projects is again the main engine of economic activity.

Not surprisingly, the investing class, its rating agencies and press have resorted to savaging the European Union’s southern flank, provoking huge financial losses to the Spanish, Greeks, Italians, Irish, and ultimately to France and Germany. In this protracted battle one could foresee the signs of a social tsunami in the making. The signs are everywhere, from Athens to Bucharest, from Germany to Spain. In the months and years to come, the protests will increase in intensity and are set to sweep away entire political structures built around neoliberal tenets.

To be sure, this is not an exercise in ball gazing, but the result of an extrapolation of observable tendencies, as J.A. Schumpeter would have put it. A few years from now, huge economic inequalities within societies would cease to be acceptable. Financial speculation and low taxes would become a thing of the past. Whilst foreseeable, the outcome is not going to be reached comfortably and without defeating entrenched and powerful financial interests together with their many helpers.

Author : Spotlight on Geopolitics
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English, External Relations  , neoliberalism