Democracy, the State and the Market

When Post-Democracy was first published, the boosterism of globalisation hadn’t yet run aground. Thomas Friedman, for so long among the first rank of its cheerleaders, termed the surrendering of domestic political and economic sovereignty involved ‘the golden straitjacket’: any decline in political autonomy would be compensated for by accelerated economic growth, with enough proceeds trickling down to the world’s lower orders to satisfy them and prevent them from getting any other ideas.

Crouch’s view of globalisation was never so sanguine, and he repeats his long-standing anxieties here. (Indeed, even for Friedman, the old ‘golden straitjacket’ has lost much of its lustre.) For Crouch, the transfer of sovereignty from national governments to multinational bodies and corporations – not to mention central banks – has “removed major economic decisions to levels that could not be reached from where democracy was concentrated: the nation-state”. No transnational demos has emerged, nor have international institutions proven conducive to fostering one (a purpose for which they were explicitly not established).

But globalisation as we know it was never inexorable. It wasn’t just opposed by, for example, the Bennite Labour Left of the 1970s and ‘80s with its Alternative Economic Strategy. Adom Getachew’s Worldmaking After Empire documents how the alternative put forward by the proponents of the New International Economic Order – including figures like Julius Nyerere, Michael Manley and Kwame Nkrumah – also contested neoliberal globalisation with a proposition of a more egalitarian global order which held the right of decolonising countries to economic and political self-determination. The far more powerful leading governments of the global North succeeded in warding off this threat, continuing to subordinate their former colonies to their own preferred form of globalisation – one based on resource extraction, financialisation and the hyperexploitation of cheap labour – congratulating themselves on their liberal-democratic bona fides all the while.

Globalisation having curtailed the ability of national governments to shape economic policy, the neoliberal ideology that drove it “has turned this weakening of the nation-state into a virtue”. For Crouch, neoliberals view governments as “almost by definition incompetent” and sought to strengthen the power of multinationals as more dynamic, efficient stewards of economic well-being. But neoliberalism was never about simply weakening the state –instead, it requires continual state intervention to create and shepherd market mechanisms, as well as obligatory bailouts and subsidies (as we see in the current crisis). The anti-statist rhetoric of neoliberal populism bears little resemblance to the actual practice of neoliberals in government.

Crouch recapitulates the response of global financial institutions to the 2008 financial crisis – a textbook example of the divergence between neoliberal rhetoric and practice – in some detail. Tens of trillions of dollars were pumped into the banking system, with no reference to electorates, to save it from itself. Those electorates would be made to foot the bill, however, in the form of swingeing cuts to social safety nets once the immediate crisis was over. With the socialist Left largely in disarray throughout Europe, it was primarily the reactionary right that proved to be the immediate beneficiary of the discontent thereby generated.

Despite all this, Crouch can see no way out. He calls for “a strengthening of world-regional institutions with a democratic component”, but does not specify how this might come about, or in what form. He defends the toothless European Parliament (which “may be weak and post-democratic, but it exists”) and insists we must “find ways of rooting [these institutions] more genuinely in the lives of Europe’s citizens, not laugh at them for their democratic inadequacy”. But who brings about this “rooting” is unspecified, and few people in Europe – certainly not those committed to the strengthening and extension of democracy – are laughing.

Crouch suggests that global institutions (he lists the OECD, IMF and World Bank) have “changed their approach towards inequality, redistributive taxation and the need for constructive public action”, and even argues that this apparent transformation has come about “precisely because they have an international perspective and no political axes to grind”! The alternative to technocracy overseen by these institutions, he suggests, is even worse: “our choice is between that and a global economy with no democracy at all”. But any concessions to economic heterodoxy belatedly made by the IMF et al – immensely powerful institutions subject to no popular accountability – are made with the intention of shoring up an inherently unjust, unequal and anti-democratic status quo, renewing it by appropriating defanged versions of its opponents’ ideas.

Liberalism Against Democracy

Crouch’s puzzlement is partly explained by his somewhat rosy view of liberalism’s actual record on democracy – not just over the last 40 years, but throughout its history. His appreciation of liberalism leads him to take its self-justifications at face value. Crouch hails liberalism’s apparent recognition “that human knowledge is fundamentally uncertain, and that even firmly held beliefs might prove to be wrong”, and that therefore it is “tolerant of diversity and of approaches with which one is not personally sympathetic”. Anthony Arblaster convincingly took issue with this sort of portrayal 35 years ago, as he put it then: “Liberalism has been, and in some of its forms still is, quite as ‘doctrinaire’ as the rival ideologies which liberals so freely denounce.”

We need look back no further than the last few years for proof. Among the liberal centre – where anti-democratic attitudes are worryingly prevalent – the reaction to the challenges posed by Corbyn and Sanders (neither of whom are even mentioned by name in Crouch’s account) was one of bitter antipathy. Corbyn was personally vilified to an extent not seen in British politics since the 1980s, the heyday of Tony Benn, Arthur Scargill and GLC-era Ken Livingstone. It took over four years, but it did much to destroy him. With Sanders, it took the bureaucratic power of the Democratic Party machine to crush his insurgency for a second time. But neither Corbyn nor Sanders seriously tested the boundaries of left-wing social democracy; it took these veteran socialists to propose the kind of social reforms which mostly might have been considered standard for the centre-left during the Keynesian era.

Crouch attributes the degeneration of liberal democracy to rising inequality and the baneful influence of corporate lobbyists – he talks of “the corruption of liberal democracy by wealth” – but doesn’t seem to recognise the anti-democratic impulses at the heart of much liberal doctrine. If liberalism was so committed to democratic advance, we must ask why it took so long for workers to prise the franchise from its grasp. Liberalism’s complacent assumption that it is inseparable from democracy needs to be scrutinised. A cursory examination of the record shows that the liberal fear of democracy runs deep. 

As C.B. Macpherson argued in The Real World of Democracy, democracy was originally interpreted by elites – including liberal ones – as threatening “rule by the common people”, as “a levelling doctrine”, and scorned on that basis. Liberalism had long been hegemonic in the state and civil society before mass democracy was successfully appended to it, as a “top dressing”, in Macpherson’s words. However, as Macpherson acknowledges, certain key tenets of liberal philosophy made it somewhat susceptible to democratic pressures, especially framed in terms that liberalism understood as its own – namely the working class taking its place in the political market, exercising its right to consume and choose from the options put before it. 

Some liberal theorists have been more stridently anti-democratic than others. Neoliberal doyen Friedrich Hayek, of course, famously articulated his preference for a “liberal” dictatorship to an illiberal democracy. This is at least candid, and the contradiction between political and economic liberalism – between a nominal commitment to political pluralism and the defence of private property – is a circle that liberalism has never squared satisfactorily. In extremis, it has meant the jettisoning of the former to safeguard the latter, with some erstwhile liberals (including Hayek) throwing their lot in with the generals. More everyday forms of voter suppression and gerrymandering continue to proliferate in the ‘advanced’ liberal democracies of the global North to this day, primarily disadvantaging working-class people of colour.

Crouch seems reluctant to accept that the prerogatives of capital unavoidably conflict with democratic interests. He sincerely laments the immense amounts of wealth and power concentrated in the hands of a tiny few, asking “whether capitalism and democracy are today as mutually reinforcing as they once seemed to be, or indeed even mutually compatible”. But this is as far as the question is taken. Crouch is left fumbling for a resolution, concluding that, in a society already subordinated to ‘the market’, perhaps more effective market mechanisms might be our salvation. There is no elaboration on how such a state of affairs might possibly be brought about, nor is there any recognition of the political conflict that any substantial reduction in social inequality would inevitably involve.

The reality is that it now takes relatively little to rein in reformists who get above their station. What Adam Przeworski has called “anti-majoritarian mechanisms” – including independent central banks, judicial review, investor-state dispute settlements and constitutionalised fiscal constraints – serve to shield private property from the less well-off. Those governments that ‘go too far’ in extending workers’ rights or social welfare measures leave themselves at the risk of capital flight and investment strikes, a powerful disincentive to even modest social-democratic reforms. For all the fretting about the wellbeing of liberal democracy in academic circles and the centrist commentariat, capital has no qualms about resorting to extra-parliamentary direct action of its own.

Up from Reaction?

The political consequences of neoliberal globalisation have come home to roost in those countries which led the charge for it. Crouch notes with concern the break-up of the constituencies which once formed the base of New Deal liberalism and European social democracy. The crumbling of Labour’s ‘red wall’ in last December’s general election was years in the making: it followed the party’s earlier collapse in Scotland, although there the discontent found a more centre-left expression centred on the national question. The crushing of trade unionism, and the disappearance of the old industries in which those unions were organised, has left many susceptible to the populist far right. Few who cast their vote for the far right seriously expect it to better their lives, but it compensates by offering the vicarious satisfaction of tormenting the more unfortunate.

Crouch analyses the breakdown of the old certainties and how this has resulted in profound political disorientation, depriving many people in former industrial heartlands of a real sense of identity or shared political purpose beyond taking out their frustrations on scapegoats and interlopers. Fragmented electorates are left effectively unable to articulate their collective concerns and force them onto the political agenda, over which the media now have greatly enhanced power. Nationalist nativism tends to fill the vacuum. Crouch, having recognised the potential potency of right populism as one reaction against post-democracy, admits failing to foresee “how it would mark more an intensification of post-democratic trends than an answer to them”. The collapse of post-war reformism thus continues to cast a long shadow over Europe and the US.

Beginning in the 1930s and continuing more broadly in the decades immediately following World War II, US and European governments embarked on a programme of quite extensive social reform. Welfare programmes were scaled up, trade union rights expanded and near-full (male) employment pursued. Previously, Crouch notes, ruling classes had fiercely resisted any substantial wealth redistribution, going as far as sponsoring fascists to bring labour movements and the Left to heel in countries including Italy, Germany and Spain. As well as bolstering social democrats in a number of European countries, the post-war period also saw the rise of welfarist Catholic conservatives – Christian democrats – who played an important role in constructing some European welfare states, sometimes in coalition with social democrats or under pressure from Communists.

The ‘thirty glorious years’ after the Second World War remain the apogee of European social democracy; Crouch is evidently an admirer of its achievements in this period. With the global economy booming in the aftermath of war, the perceived threat of Communism to contend with, and popular memories of the ‘Hungry Thirties’ still strong, capital was both able and felt it necessary to accommodate more generous social reforms than it would have conceded before. Though many of these gains were unceremoniously rolled back from the 1980s onwards, they continue to exert a powerful hold on the imagination of the European left, and some of the institutions from this time survive – the NHS, though battered by years of underinvestment and marketisation, remains the most revered institution in Britain (albeit having been thoroughly depoliticised and recast as a sort of charity, its radical origins successfully obfuscated).

From a democratic standpoint, though, the record of the post-war social democracies leaves plenty to be desired. Public ownership was extended, but economic democracy remained a pipe dream. Directors of nationalised firms were often plucked straight from their privately-owned counterparts. Most people were dictated to every day in the workplace, and this itself eventually became a source of much discontent towards the social-democratic order. Its welfare measures, while doing much to improve working-class lives, were too often administered in a high-handed, bureaucratic manner, alienating even many of their beneficiaries. The 1980s neoliberal counter-revolution, stealing some rhetorical clothes from the post-’68 New Left, was thereby able to present itself as a liberation from the heavy hand of the paternalist state; ‘paternalist’ being the operative word, as the interests and opinions of women were often accorded a low priority.

However, such questions are largely beyond the scope of Post-Democracy After the Crises. Nor is there any apparent recognition of the liberal centre’s role in creating the conditions in which the far right can prosper. In Europe’s Fault Lines, Liz Fekete reminds us that the ‘war on terror’ discourse of the post-9/11 years massively boosted the far right, whose preoccupations with the supposed failings of ‘multiculturalism’ were absorbed into the political mainstream. Upon coming to power, the populist right inherited a state apparatus of militarised borders and invasive surveillance bequeathed to it by centrist predecessors. Crouch himself almost gets at this with his implicit acknowledgement that the rise of right populism represents an intensification of pre-existing trends rather than a radical break, but he doesn’t develop the insight further.

With right-wing populism already firmly embedded both institutionally and ideologically, only relatively fragmented progressive forces are lined up against it, a problem compounded by the defeat of Corbyn and Sanders. Crouch looks to the recent revival of environmental movements as a potential bulwark against this ebullient far right, but these remain politically inchoate, an amalgam of direct-action protest and a moralistic liberalism prone to counter-productive gestures. There is also, as Crouch hints at, the prospects for environmentalism to take a darker, more nationalistic and exclusionary turn (and a degree of Malthusianism already resides in certain recesses of Extinction Rebellion).

Nonetheless, Crouch holds out hope that the green mainstream will prevail, with its tendency to “stress the scope for environmental entrepreneurialism and for public and private action to use technological advance to produce cleaner, more energy-efficient economies”. But given how rapidly we’re approaching climate tipping points – those we haven’t already passed, that is – this is drastically inadequate to the scale of the transformation required if we are to hand down even a liveable planet to future generations. In addition, the defeat of Corbyn and Sanders, along with their proposed Green New Deal, ensures even more years of lethargy and inaction on climate change.

Failures of Nerve

This is where Crouch’s book proves most unsatisfactory. While he correctly identifies many of the critical problems, and recognises the severe dangers of failing to address them, his proposed solutions are not remotely sufficient for doing so. Paolo Gerbaudo is right that this exemplifies the current confusion of the centre-left: on one side, a genuine abhorrence at astronomical inequalities of wealth and power, and dismay at how these have distorted the limited forms of democracy we have. But on the other is an inability to countenance the kind of measures that would be necessary to even begin redressing these inequalities.

Renewing democracy and setting it on a firmer footing requires extending it into new spheres, but this would involve an intrusion on the prerogatives of private capital that even the more progressive wing of liberalism baulks at. All it can do is cling, torpified, to widely (and often justly) resented institutions in the hope that these will provide some sort of safeguard against nationalist revanchism. Such hopes, however, are likely to prove illusory. This timidity compares unfavourably to the radicalisation of liberal thought during the Great Depression era, when prominent social-liberal intellectuals rising in influence (including John Maynard Keynes himself) demanded ambitious social reform, doing much to create a political space for both social-democratic and Christian-democratic governments to fill.

Certainly, the centre-left in the US and Britain has retained enough institutional power – with its easy access to prominent media outlets and its tight grip on party bureaucracies – to successfully see off the recent challenge of left populism, waging an aggressive and at times disturbing campaign to delegitimise socialists and quickly deprive them of the tenuous foothold they had regained in mainstream politics. The right populists’ disastrous handling of the Covid-19 pandemic, meanwhile, may prove so politically damaging that it grants the liberal centre a route back to government. Yet the latter has little idea of what it would do were it to get there, nor does it show anything like the wherewithal needed in facing the urgent challenges of our time. The only recent cause in pursuit of which centrists have displayed any vim and vigour has been that of protecting their power and privileges from the socialist Left.

None of the recent ‘crisis of democracy’ literature reckons with the further damage done to liberal-democratic institutions, already struggling for popular legitimacy, by the centrist war against the Left. What was most remarkable about the Left populism of Corbyn and Sanders was not their radicalism but their moderation. These were movements prepared to work within constitutional boundaries in pursuit of reforms. Their reward was to be traduced, slandered and treated as subversives, as if their aspirations for democratic social change were wholly illegitimate. It remains to be seen what long-term political effects all this will have; it could boost street-based movements (as the recent revival of Black Lives Matter would suggest) but alternatively, it may ultimately reinforce the nihilism and despair on which the far right thrives.

If it falls to a befuddled political centre to lead the defence of democratic freedoms, especially in the maelstrom of the coming economic crisis, then those freedoms stand on alarmingly flimsy foundations. Another sharp shift to the right would likely follow in due course. In the years ahead, therefore, it will be up to socialists to do what they can to defend and build upon the most democratic aspects of liberalism where liberals themselves prove unable or unwilling to do so.