Liberal Democracy: On the Brink Again?

As Thomas Paine wrote during the American Revolution, we are living through times that try men’s souls, mainly because of the deep divisiveness that is fragmenting American society and that of other countries as well. In the United States, there were divisive epochs during the last part of the 20th century—particularly in the 1960s. But today’s dissension is different: it is not over specific issues that can be overcome with changes in policy or institutional reform, but over different beliefs regarding the structure that should frame the social order. This new dissension resembles something usually alien to US culture: ideological enmity.

A similar enmity took over in developed countries about a century ago, mainly in Europe, and it opened the door for the emergence of the most criminal tyrannies the world has known, fueled by the monstrous ideologies of fascism and communism. The tragedies unleashed by these regimes prompted the question, could it happen here? Most people answered in the negative, and in fact, it did not happen. Ever since, we have thought that this cannot happen in the United States. Our times, however, are so like those of the previous century that the question must be asked again. The answer is not as clear-cut as it was 100 years ago because American society is not as cohesive as it used to be. It may depend on what the American people do in the near future to recover their cohesion. This, in turn, depends on the extent to which they retain the values of freedom and respect for the rights of all that gave shape to the American Dream.

Doctrinaire Politics

What divides Americans is not the kind of totalizing ideology seen in Europe a century ago. Conservative and progressive positions regarding specific issues have emerged from pragmatic alliances formed by single-issue pressure groups. In this way, for example, those in favor of abortion become aligned with those in favor of immigration and health reform—alliances that are not necessarily philosophically congruent.

These two general attitudes have always existed in the country, but they were not strictly defined in all dimensions of life, so that generally conservative and generally progressive people could easily agree on many specific issues. Likewise, not all generally conservative people or all generally progressive people shared the same opinion on any conceivable issue. Now, conservatives and progressives attach themselves to their respective doctrines so closely that on almost all important issues, the country has been split in half.

One of the results of this polarization is that large numbers of people on both sides of the ideological spectrum no longer want to elect centrist politicians. Rather, they support determined fanatics. And they ask from them total ideological consistency.

Another alarming similarity with the early 20th century is the trend to form political coalitions by framing all the problems of society as the result of the perverse actions of a minority—be it immigrants, white males, or Jews—thus injecting divisiveness into political discourse as a means of unifying the majority. It was because of such hatred that destructive regimes emerged in the early decades of the 20th century. While Hitler was trying to blame the Jews and communists for all problems, the communists were blaming the bourgeoisie and Nazis. This competition of hatreds is the perfect environment for chaos, which in turn conditions people to accept tyranny for the sake of a strong social order. It legitimized tyrannies and destructiveness in the 20th century. It is what may legitimize destructiveness in our own time if we don’t stop this sinister competition. And we are foolish if we think the same can’t happen here today, should the social order collapse and people turn to a strong leader to reinstall order.

Technological Revolutions

The sobering similarity between those times and ours may also have a similar root cause. We, like Europe of the early 20th century, are emerging from a process of deep social transformation, caused by a technological revolution.

Technological revolutions, while opening the road for a better future in the long run, are terribly disruptive in the short term. They disrupt the social order for two main reasons. First, they render obsolete the technologies they replace, and with them, the value of old equipment and the skills, knowledge, and jobs of people who worked with it. The fall in the value of old human and physical capital assets results in unemployment, social suffering, and financial crises.

The Industrial Revolution opened the door for communist and Nazi-fascist systems because many people thought, like many do today, that liberal democracy was to blame for the instability brought about by the technological revolution.

To make things worse, different groups adjust at different speeds to the new opportunities created by the revolution. While the fast adapters improve their incomes, others fall behind. This leads to the fundamental source of divisiveness in society: a growing gap between these two groups in terms of income and quality of life. This divisiveness becomes even worse if, as is likely to happen, it comes to worsen existing social fault lines and resentments.

The Industrial Revolution exponentially increased the wealth of societies by multiplying the power of the muscle through formidable machines and new production methods. As production became increasingly dependent on these new inventions, machines rather than people became the most important factor of production. Everything became massive.

A new social order was needed to manage the new industrial society that was emerging. A decentralized mechanism was needed to coordinate an industrial economy infinitely more complex than the agrarian one it replaced. Gradually, webs of contracts between private parties replaced the strict commands of both feudal lords and guilds as the main mechanism to introduce order in the new economy. This web of contracts created the basic infrastructure of modern capitalism. Politically, democracy—also a network of equals—became the logical response to the complexities of life in this new society.

But the Industrial Revolution also eventually opened the door for communist and Nazi-fascist systems because many people thought, like many people today, that liberal democracy was to blame for the instability brought about by the technological revolution. They thought that the only system that could ensure the survival of social order was autocracy, either as it had existed previously or as presented in communism and Nazi-fascism. In this way, a technological revolution that pushed for horizontal forms of social organization also pushed, by reaction, for the most vertical systems of government that had ever existed.

Vertical and Horizontal Regimes

Why did some countries choose the way of democracy and others the way of destructive regimes? Those supporting authoritarian regimes argued that they act faster and more efficiently than liberal democracies, encumbered as they are by their checks and balances. However, if this were true, the countries that faced the Industrial Revolution with authoritarian, undemocratic regimes—countries like Russia, Italy, Germany, Austria, Spain, and others—would have been the most successful in the adjustment to that process. In contrast, those countries that faced industrialization with liberal democratic regimes—such as the United States, Britain, Ireland, France, Holland, Belgium, Switzerland, the five Nordics, Canada, Australia, and New Zealand—would have failed in their adjustment, devolved into chaos, and led their populations to unspeakable tragedies. Everybody knows that the story was the opposite.

This was so because authoritarian states resist change until they snap into chaos and revolution because the aim of authoritarian leaders, once they obtain power, is to keep things as they are to prevent the emergence of innovators, who would be potential rivals. In the process, they kill the diversity that is the mother of creative adaptation to changes. Without the capacity to adapt, they resist change until they collapse under its sway, creating the conditions for the emergence of tyrannies. In this setting, change becomes an enemy of society, as the expansion of democracy became the enemy of the Second Reich in Germany, the Tsarist regime in Russia, the Hapsburg in Austria, the vertical regime of Spain, and so on.

Horizontal orders require a kind of self-control rooted in respect for the individual rights of everyone else—something that only mature societies can show.

In contrast, liberal democracies reconcile the need for social order with the possibility of change. In liberal regimes, government promises to defend individual rights, which gives society economic and political freedom. As a result, people do not see change as a threat, but as the normal manifestation of this freedom. Nobody is restricted by a goal established by the government. Economic and political powers remain separate and independent from each other, which allows the society to develop a critical flexibility. Adjustment to change—rather than instinctive opposition to it—becomes the norm.

If flexible societies have the advantage in the long run, why do so many societies choose vertical, rigid forms of organization? Vertical order is the most common because it is the easiest to obtain. It subordinates the diversity of a conglomerate to the will of a central decision-maker. It uses coercion to create uniformity out of diversity. Horizontal order is much more difficult to achieve because it does not create uniformity. Rather, it harmonizes the strains of diversity to produce a collective will, leaving diversity in place. Such horizontal orders do require, however, a kind of self-control rooted in respect for the individual rights of everyone else—something that only mature societies can show. Verticality promises to create social order when such self-control does not exist.

That was the lesson of the Industrial Revolution—those countries that allowed for change by respecting the rights of all to adapt to the new world succeeded. Those that did not lapsed into chaos and eventually authoritarianism. And this, as we discuss later, is the main danger that is threatening American society.

The Connectivity Revolution

The Industrial Revolution ended with the World Wars. The new revolution was set in motion in the 1980s by the combination of computers, telecommunications, and rapid transportation. This combination made it possible to coordinate complex tasks at a distance and combine the intelligence of people and machines for infinite purposes. It has changed the direction of progress, from multiplying the power of muscle (the Industrial Revolution’s aim) to multiplying the power of the mind.

This ability to coordinate tasks at a distance led to globalization, which reordered worldwide production through the global chains of supply, structured in such a way that each economic operation is carried out in the most convenient places in terms of skills and costs. Yet, when doing so, job positions moved across borders, leaving many people with their skills devalued and unemployed. Artificial intelligence has opened infinite new ways to advance science and production by taking care of tasks that could previously be carried out only by human beings. For the same reason, it is rendering valueless the skills of the people who carried them out. Moreover, the current revolution is disrupting the social order in a particular way. Though it has developed instruments to get people closer to each other, it has backfired, as much of social media has become merely a vehicle to inject hatred. This hatred feeds on regional, racial, and sexual inequalities (real or perceived) that existed beforehand, leading to a serious reduction in the social cohesion of American society.

Thus, the new revolution will surely create disruptions of the same order of magnitude as those that created havoc a century ago. These disruptions cause much of the divisiveness that is subverting democratic institutions. To avoid a breakdown like those of 100 years ago in Europe, we must learn to manage our adjustment to the new society that is emerging from new technologies in a flexible way as the countries that developed liberal democracies did during the Industrial Revolution.

Could it Happen Here?

Any solution to the economic, social, and political unrest posed by the technological revolution must address two elements of the problem. The first is a matter of public policy. For both economic and political reasons, the country must invest in the human capital of those left behind to minimize differences in the speed of adjustment of various groups and accelerate the speed of adjustment of society as a whole.

The second part of the solution is more complex. We must prevent the erosion of our liberal democracy, both because it is the only system that is compatible with the preservation of individual freedoms and rights and because it is the most flexible of all systems. That is, it is essential to preserve liberal democracy for reasons of ends and for reasons of means. This is more difficult than it sounds because the seat of liberal democracy is not in the institutions but in the values of the individuals who create and maintain them. There is no institution that cannot be corrupted if its creators are corrupt. Conversely, no institution will die if it lives in the hearts of its constituents. The divisiveness that the disruptions of the new technological revolution have brought to the fore is only worsening resentments that were there ready to emerge—resentments that weakened the social cohesion that was the mark of the American society.

But resentment is not the only source of this weakening. There is also the idea that the strength of liberal democracy is exclusively in its ability to promote self-interest—as if the marvelous construction of the rights of the individual and the government of the people, by the people, and for the people could be created and maintained in a society where people thought only of themselves. If this were correct, the now developing countries would be the most developed societies, the ones with the best liberal institutions, because the most visible of their features is their lack of social cohesion—of social interest. But because people only think of themselves, they are underdeveloped as nations. They are the ones suffering from more corruption as well because there is no ethics for persons who think that their only duty is to fulfill their own desires. No, liberal democracy thrives on the freedom to better oneself, combined with the self-restraint that comes from respect for the rights of all.

Ominously, because of asymmetric disruptions and the new and old resentments they elicit, divisiveness and hatred have been increasing rapidly in the United States, getting closer to the thresholds that could trigger a collapse of the social cohesion that has maintained the country’s unity throughout its history. American society may be becoming too rigid to handle the uncontrollable change stirred up by this deep technological revolution. It may have lost the critical flexibility that is required for harmonious adjustments.

This is a problem of values. To resolve it, people must overcome their self-interest, respect the rights of others, and commit to the preservation of our free society with its critical flexibility. This is the constructive social interest America needs. Only if they recover it will the American people be able to overcome the challenges it now faces and use the technological revolution to become an even richer and happier society in the midst of this transition.

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