On the morning after Brexit, it is clear that Western democracy is in crisis. In these richest countries of the world, the last time democracy looked as fragile as it does now was in the 1920s, and we all know what happened after that. The rise of the rabid Right everywhere, from Ukip in Britain to Marine Le Pen in France and Norbert Hofer and the Freedom Party in Austria to Donald Trump in the US, has many of us holding of our breaths about what will come next.
Unlike in the 1920s there is nothing undemocratic about what has happened so far: The standard-bearers of the extreme Right have progressed by getting people to vote for them, in elections that were fair and square, if not actually loaded against them — Trump had a substantial part of the Republican Party leadership conspiring to stop him.
Which brings us to the basic conundrum of democracy: What if the electoral process leads to outcomes that undermine core democratic values? Democracy aspires to be more than the rule of the mob that gets the most votes. This is why freedom of speech and of the media, civil rights and other constitutional protections, and an independent judiciary are part of what defines democracy. What if those who win power don’t care about any of those things? Can we trust racists to protect the civil rights of the groups that they attacked in the process of coming to power or to defend them against their own marauding supporters (who are simply taking the message of their campaigns to their logical conclusion)? Will those who have shown no respect for the media while campaigning bend over backwards to protect journalists? Do we believe that the courts can rein in a man like Trump who has openly accused the judge on the Trump University fraud litigation of being prejudiced because the judge’s parents were from Mexico? What would he do if he were president? Cancel the Supreme Court? Or just ignore its diktats? And once that happens, how much of what we really value about democracy would we be left with?
So how did countries like the US, Britain and France, countries that have been on the forefront of promoting democracy, end up here? A part of the answer goes back to the nature of democratic governance — democracy celebrates people’s power, but those who rule, the leaders and their chosen bureaucrats, are mostly members of the elite, at least in terms of their education. Obama, Bush and Clinton were Ivy League graduates, and of the last three British PMs, only Gordon Brown did not go to Oxbridge, but then he has a PhD. They were acceptable to the voters not because the voters could easily identify with them — but because they were supposed to have the brains, skills and the vision to do a better job of managing the economy and the State. As long as it delivered an improvement in the standards of living for most people, this “division of labour” worked: Voters were happy to vote and leave their leaders to pursue their dreams.
But somewhere around 1975, the economic model that the leaders from the Right and Left had mostly agreed upon started to fall apart. Growth slowed, inflation exploded. The social democratic consensus, a mixture of free markets, Keynesian policies when needed and significant amounts of redistribution, which had delivered sharply increasing rising standards of living for the previous 30 years, appeared to have stopped working
The leaders panicked — they needed the consensus to go on. As it happens in such times, many messiahs emerged from the woodwork to deliver new recipes — be it monetarism or low taxes, labour market interventions or an expanded role for the State. The US and Britain under Reagan and Thatcher went Right — cutting back on redistribution and lowering taxes. Countries in continental Europe either went some distance to the Left (like France under Mitterrand) or came up with their own concoctions. Perhaps some of these worked better than others — but mostly the good years never came back. In the US, wage growth for the average worker stopped, and has never recovered. In continental Europe high unemployment, and especially high unemployment among the young, has become the norm. Inequality keeps going up and growth remains anaemic for the most part.
Facing this, the best the parties of the mainstream could do is to counsel patience — hold tight and things will eventually improve. Voters were patient with all this, but the warnings signs were there. The Republican Party, the traditional party of free market economics, recognising the waning resonance of its economic message, started emphasising majoritarian views on race and religion as other reasons to vote for it. A similar, if less extreme, drift was seen with the other mainstream parties of the Right in the West.
But these were inherently unstable moves. Once this discourse enters the mainstream, others, less aligned with the elites and less squeamish about being openly racist, can deliver the majoritarian message with much more conviction — this is what Trump and the Ukip, the Alternative for Germany and the Front Nationale, are doing.
It does not help that when the mainstream parties claim that they are better at running the economy than these newcomers, many people no longer believe them. It is no accident that the new parties of the Right are all anti-immigrant and anti-globalisation: The mainstream has always insisted that immigrants and imports from cheaper competitors is nothing to worry about—in fact recent evidence suggests the first may be true but not the second, but to the man in the street this has never made intuitive sense. When the economists were delivering results, voters were willing to trust their superior expertise, but now they have no reason. Hence Brexit.
If democracy as we know it has to survive the elites have to regain their credibility. And they have to start by admitting that their economic model is broken.
Abhijit Banerjee is Ford Foundation International Professor of Economics, and director, Abdul Latif Jameel Poverty Action Lab, MIT
The views expressed are personal