The rise of liberal undemocracy

Liberal democracy has been the bedrock of our society since the Second World War. The combination of representative democracy and a degree of economic and social liberalism is what united the West during the Cold War. It is this vision of government that we exported around the world, and since the fall of the Berlin Wall it has become the political structure that every country (bar a few exceptions) claims to have. Liberal democracy is so universal that it could be called the default form of government.

Now liberal democracy is being challenged in its own cradle. A conflict between liberalism and democracy has been born out of an old fear about democracy. Democracy has always been threatened by two fears: first, that the poor will use democracy to appropriate the wealth of the rich, and second, that democracy means the rule of the stupid over the smart against everyone’s best interest.

This has led to the rise of liberal undemocracy amongst liberals. Support for liberal undemocracy has become more prevalent in the UK since Britain voted to leave the EU. In its crudest form, it is the expression that the public is too stupid and too easily manipulated to be trusted with elections and referendums, with Brexit as the self-evident evidence of this. Liberal undemocracy’s more sophisticated form is the argument that it is in everyone’s best interest that the public are not allowed to make certain decisions.

Let me be clear that this criticism of liberal undemocracy is not support for Brexit. I am against Brexit, because I believe in workers’ rights and environmental protection at a European level. I believe that Britain should stay in the EU - mainly because for the above reasons it offers - but I am against liberal undemocracy for the reasons that I will outline below.

The reason for the popularity of liberal undemocracy is a belief in a greater good of public policy that is above politics and ideology. This is optimised by the reliance of Western governments on technocratic institutions, such as the European Commision or the Bank of England. These institutions were either created or given their independence to prevent politics and public opinion from influencing certain economic policy decisions. They work by moving key decisions away from parliaments - which respond to the will of the public through elections - to non-government institutions that are supposed to persue a non-ideological greater good of public policy. In short, they focus on “what works” rather than what people want, and as such they are fundamentally undemocratic.

There were good reasons for these institutions to be set up in the way that they were, as they stop politicians from making bad decisions that are politically convenient. However, they have their flaws as well, which were exposed in 2008 when the rule of "what works" in terms of economic policy stopped working. Our technocratic institutions did not save us from the banking crisis and biggest recession since the Second World War, despite having their independence.

What works stopped working because these institutions were free from politics, but no one is free from ideology. Technocratic institutions pursued what works, but no one asked the question who does it work for? It turns out that the who was large banks and finance companies, which focused on short-term profits. Our technocratic institutions were supposed to focus on the long-term health of the economy, but they failed to do so and we all suffered in the Great Recession.

The people running technocratic institutions (usually cut from the same upper crust of society that most politicians come from) are not free from ideology or prejudice. They may be independent from the daily cut-and-thrust of politics, but their decisions will still be influenced by how they see the world. Our technocratic institutions believed in free market economics so blindly that they did not foresee the banking crisis they were supposed to prevent. They were so wedded to this ideology that they saw no problem in turning over the fate of our economy to banks and finance companies that focus only on the short term and then to ignore the long-term consequences of this.

Technocratic institutions suffer from institutional rigidity and can be slow to change. This is one explanation why they did not act to prevent the baking crisis despite the warning signs. During the boom years of the 2000s they could not allow any other point of view beyond their own faith in neoliberalism. Due to their independence, there was no way to ensure that different opinions were heard in the meeting rooms of the technocratic institutions where all the important decision about our economy were made. We trusted them and they failed. This is the fundamental flaw of technocratic institutions.

If these technocratic institutions had been more accountable, then there was a chance that we could have seen their failure before it was too late. The lesson from years of liberal democracy is that accountability can only be through democracy and our institutions are stronger when they are more democratic. Parliament has it flaws as well, but it is responsive to change and more transparent than separate technocratic institutions.

The idea of liberal undemocracy is spreading because of decisions like Brexit and the second fear about democracy: the rule of the stupid over the smart. Voting to leave the EU was the wrong decision, but the voters were not divided between smart or stupid, there were plenty of smart or stupid people on both sides. The divisions in the referendum were between young/old, graduates/non-graduates, town/country and how we view the changes to the country of the last 40 years. No one should be denied a vote because they are old or from rural areas the country, which is essentially the argument of “stupid people voted for Brexit so stupid people should not allowed to vote”.

Liberal undemocracy is fundamentally not compatible with left-wing politics, because it appeals to a fundamental mistrust of the people. Liberal undemocracy involves taking decisions away from people because they cannot be trusted to make them and giving them instead to people who are supposed to be above politics to look after the greater good. In reality, these people pursue a narrow interest and are as ideologically-driven as anyyone else. On the left we need to believe that the people can make good decisions and not that decisions should be taken away from them.

The EU referendum result was a bad result, but we should not dismiss democracy because of it. We need to resist liberal undemocracy, because our institutions are stronger when they are more accountable through democracy. On the left, we need to recognise that liberal undemocracy is not the way to fight the other big threat to liberal democracy, which is illiberal democracy. More on that in the next post.

Bank of England picture taken by Martin Pettitt and used under creative commons.