Democracy Without A Demos

Mike Jones writes:

The ambitious “theory of capitalism” has been an important intellectual genre since at least the publication of Adam Smith’s The Wealth of Nations. Such theories describe the essential features of a capitalist economy and how they function.

The most popular example of recent years is Professor Wolfgang Merkel’s landmark essay, “Is capitalism compatible with democracy?”. Published in 2014, Merkel attempts to explain the always-interesting question of why deregulated and globalised markets have seriously inhibited the ability of democratic governments to govern.

Merkel’s judgement, whilst laconic, is generally quite sound: The basic “logics” of capitalism and democracy are fundamentally different and lead to considerable tension between the two. Democracy is egalitarian; capitalism is inegalitarian, at least in terms of ownership.

For political theorists in the liberal tradition, like Francis Fukuyama, the tension in democratic capitalism between its competing logics is overcome through a strong welfare state and settled distribution of property.

Writing in 1989, Fukuyama was in no doubt about the foundational role of capitalist democracy in what he described as “The End of History”. “What we are witnessing,” he wrote, “[is] the end point of mankind’s ideological evolution.”

Of course, history hasn’t exactly ended yet: capitalism since the Cold War has become less democratic, and democracy less capitalist. Fukuyama correctly predicted that the voluntary exchange of goods and services would become the dominant system around the world.

What he failed to anticipate, à la Merkel, was the reconciliation of the capitalist model to the primacy of an authoritarian state. Some critics have cited Singapore as a major example; others have pointed to the success of state-led capitalism in post-Maoist China. Adopting universal suffrage from the Western model is no longer seen as a necessary condition for achieving higher levels of growth and living standards.

At the same time, capitalism in the European Union has broken free of the shackles of European democracy. To realise their dream of a free and prosperous Europe, EU technocrats have hived off the functions of the state and farmed them out to a complex range of unelected bodies.

European members that do not follow the rules, such as Greece under the SYRIZA government, are punished by central authorities like the European Central Bank. Meanwhile, repeat offenders have their democratically-elected leaders replaced by technocrats, as happened in Italy with Mario Monti. Understood functionally, democracy in Europe can be suspended when this is required for the stability of the common market.

Elsewhere, democratic leaders have come under immense pressure to participate in an ongoing project of “diversity management”, including past or future migration by third-country nationals. This is one important reason why so many of Hungary’s domestic policies — from strict asylum laws to an outright ban on LGBT material in schools — have ended up being sanctioned by the European Parliament.

This new system is the direct result of a massive and sustained attempt to deterritorialize politics. It has produced a method of government which can most helpfully be described as post-democratic. The aim of this system is to push “the rules of the game” beyond the reach of the will of the majority.

Behind this post-democratic system lies another problem: the accelerating power of the managerial state. There is now, for instance, a Europe-wide campaign to ban the airing of unpopular opinions on the war in Ukraine, leading to the censorship of Russian-owned media outlets RT and Sputnik. “Combating misinformation” is the slogan under which this censorship program and its many analogues are advanced.

A further effect of post-democracy is the manipulation of the modern state’s bureaucratic machinery by activist judges and officers, or what Professor Otto Kirchheimer has called an “order of political justice”.

In most European countries, lawmakers have introduced a succession of “hate crime” laws that give law enforcement agencies enormous arbitrary authority they never had before, a power they have already begun to abuse. Here in Britain, police officers have become quite open enforcers of the speech codes and attitudes of the progressive Left.

Equally important is the neutralisation of democracy in the United States. There is plenty of evidence that wealthy individuals continue to push against many policies sought by majorities of American voters. From this, a vast political lobbying industry has grown up, the main role of which is to link the private sector to central government and the big social media monopolies.

In such a system, public policy results from the accumulated pressure of the most powerful interest groups. None of this is to say that Europe does not have its own problems with corporate hierarchies. What makes the U.S. particularly vulnerable, however, is the sheer amount of power exerted by lobbying groups.

How did this happen? Two reasons: First, America’s march towards post-democracy is underpinned by the power exerted by just a handful of big companies. In the U.S., political parties rely on these companies to buy advertising and fund election campaigns. It is also normal for American politicians and high-ranking officials to form long-lasting business and social partnerships.

The former Secretary of Defence Mark Esper, for example, spent seven years lobbying for American defence conglomerate Raytheon. In the face of vigorous lobbying campaigns, U.S. officials have come to see themselves as leaders of an “international community” based on that powerful sense of American exceptionalism.

Another contributing factor is the digitisation of the mass media, which means that political power is increasingly being exercised by the five most dominant companies in ICT: Google, Amazon, Apple, Meta and Microsoft. 

This “big tech” conglomerate is protected both by network effects and the self-reinforcing advantages of acquired data. This has three effects: 1) gatekeeper power; 2) the leveraging of monopoly power in one market to enter the ancillary market; and 3) information exploitation power.

The corollary of this is that key decisions are now taken by commercial actors, who have the power to clamp down on “offensive” speech and increase penalties for users who repeatedly share “misinformation”. Notable examples include the deplatforming of President Trump in 2021 and the systematic cover-up of Hunter Biden’s business deals.

Today, it is hard to imagine Fukuyama being more wrong. Since the collapse of the Soviet Union and the fall of the Berlin Wall, capitalism has become less democratic and democracy less capitalist. Some of these tensions have been with us for a long time. But others have grown worse in recent years.

The point may seem prosaic, yet it is a dramatic departure from much contemporary commentary that continues to be grounded in the Cold War rhetoric of “good vs evil” (Boris Johnson) or “democracy vs autocracy” (Joe Biden). The realities of Western politics do not live up to these conditions. Democracy itself is becoming less easy to define: the edges have suddenly become frayed and the boundaries less clear.

Where once there was an active state-society relationship, today we have a post-democratic elite which pursues its own sectional interest oblivious to the common good — a democracy without a demos.