More about democracy and neoliberalism

Two articles from my weekend reading threw some light on recent debates about democracy and “neoliberalism”.

The first is a long read from Tom Clark, editor of Prospect, reprinted last week in the Financial Review. Clark reviews the arguments made against democracy in the wake of Britain’s vote to leave the European Union and the election of Donald Trump, and finds them wanting – although in the course of doing so he gives them perhaps a little more credibility than they deserve.

It’s well worth reading the whole thing. Particularly interesting is his discussion of Against Democracy, the recent book by American philosopher Jason Brennan, which remodels some old arguments against popular rule and puts a libertarian spin on them. Clark calls it “a meticulous, crisply written and ultimately sinister book.”

Clark is put off, in part, by Brennan’s libertarianism, which he says “could limit its appeal in Europe.” But libertarians especially should recognise the importance of democracy, because they understand the destructive nature of organised coercion and the need to keep it within orderly bounds – a task at which democracy has succeed better than anything. This is the message of Jason Kuznicki’s recent review of Brennan and related work, which makes an interesting counterpoint to Clark:

One may object that ignorant voters can’t reliably recognize a bad ruler, and there is certainly some truth to this. Majorities sometimes empower bad people and remove good ones. Yet if we take it as a given that rulers will change—and that they will change even in the absence of authoritative knowledge—it seems clearly better to have a mechanism agreed upon by which changes can happen, and by which these changes can command assent without violence. If sooner or later one ruler must give way to another in any case, how shall it be done? By a bloody and opportunistic palace coup? By the rising of an angry mob? Or by counting a stack of papers on a duly appointed day? This shouldn’t be a hard call to make.

Also thought-provoking is Clark’s discussion of sortition, or selecting legislators by lot; a key part of what the Greeks understood by “democracy”. As my colleague Stephen Mayne has argued with his work on “citizen juries”, there is considerable scope for making use of such a device in modern democratic practice, both to achieve better outcomes and to counteract the sense of disempowerment that many voters experience.

Where I think Clark is most at fault is with his easy assumption that democracy and liberalism are moving in opposite directions; that democracy’s “conflict with liberalism is likely to intensify.” On the contrary, it seems to me that correctly understood the two remain firm allies, and that enemies of one almost invariably turn out to be enemies of the other as well. Viktor Orbàn’s “illiberal democracy” is a slogan, not a reality: his actual practice is deeply undemocratic as well as illiberal.

So while Clark notes in passing that “the remedy to Trump might not be less democracy, but more” (just as I said at the time), he doesn’t pursue the thought. Yet the problems with liberal democracy rarely seem to come from elections being too democratic, or governments being too accountable, but rather the reverse. Our politicians frequently betray the public’s trust and need to be kept on a tight leash, but it’s hard to see how that is either an undemocratic or an illiberal conclusion.

Which brings us to the second piece, by economics editor Peter Martin in yesterday’s Age, on how people get seriously wealthy in Australia. His message is that our economy makes fortunes not for the entrepreneurial but for the well-connected; for people who trade on favors and government privileges and operate in highly-regulated markets.

As Martin says, “our high earners hurt us in ways that those in other better-run countries do not. They not only get ahead of others in the queue to build casinos and tunnels and the like; their lobbying can get casinos and tunnels and motorways built in the wrong place.”

Again, the bad results have come largely from the erosion of democracy: political parties that are run for the benefit of their officials rather than their members; local governments that have been emptied of actual local representation; franchising as a strategy to evade accountability mechanisms; public funding of elections used as a conduit from taxpayers to media barons. The fact that many of these moves have been marketed as “reform” merely adds insult to injury.

But there is a further lesson here in the use of that odd term “neoliberalism”, which we discussed a couple of weeks ago. A lot of people clearly use it to describe just the sort of thing Martin is talking about: running the economy for the benefit of crony capitalists rather than society at large.

It’s not at all clear, however, what that’s got to do with any sort of liberalism. And while of course you can use the word that way if you want to, you can’t simultaneously claim that the neoliberals are market “fundamentalists” or Hayekian libertarians, since this is exactly the sort of thing that those people have loudly and repeatedly argued against.

You can, of course, say that the people who’ve gummed up our economy with special privileges and sweetheart deals have used pro-market rhetoric as a screen for their misgovernment, and indeed I think that would be largely true (although there are some other things going on as well). But those who accord them the title of “liberal”, even with a prefix, are aiding and abetting that duplicity.