The Confidence Trap: A History of Democracy in Crisis from World War I to the Present
by David Runciman
Princeton University Press
Published October, 2013
The Last Vote: The Threats to Western Democracy
by Philip Coggan
Published October, 2013
It is now almost exactly a quarter of a century since history – or rather History – ended. The year was 1989. Amidst the collapsing scenery of the Soviet Union and its European satellites, a political scientist called Francis Fukuyama stepped forward to declare that liberal democracy was now the only game in town. His essay ‘The End of History?’ was published in the National Interest and foretold a future in which the human species, though still at the mercy of mere events, would cease to engage in ideological struggle. Liberal democracy, imperfect though it was, was not a phase through which humanity was moving; it was the system on which humanity was now compelled, whether it liked it or not, to settle. All other options having been exhausted, societies based on free and fair elections – and, no less importantly, free markets – would, from now on, dominate the geopolitical terrain.
Three years later, Fukuyama’s thesis was published as a book, the title of which was notable for the addition of another, rather Nietzschean, noun phrase. The text gave a more nuanced picture of the cultural and psychological problems that might attend this victory-by-default. But if The End of History and the Last Man (1992) sought to deepen and complicate the original thesis, its effect, in certain quarters at least, was to augment triumphalism and binary thinking. Fukuyama became the intellectual guru of those who espoused ‘the new world order’ – a Pangloss to the neoconservatives’ Candide. Politicians need a narrative, and in the early 1990s the narrative of the US right followed roughly the plot of Rocky IV. Having run up against the grit and ingenuity, the sheer resilience, of Western democracy, the Soviet machine had punched itself out.
Simplistic at best and dishonest at worst, this narrative now looks merely absurd – a hostage to fortune on a par with the description of World War I as ‘the war to end all wars’. For what do we find, twenty-five years down the track? Not only that democracy has suffered major reversals in Russia, Zimbabwe, Thailand and elsewhere, but also that, in the case of the United States’ largest and most powerful rival, China, democracy has not taken hold at all. The US-led wars in Iraq and Afghanistan have cast doubt on the wisdom of liberal intervention abroad, while the concomitant erosion of civil rights at home would appear to suggest that liberal democracy is a lot less sturdy than once it was, or was believed to be by the majority of its citizens.
The global financial crisis has exposed the utopian and delusional nature of much that takes place under the banner of ‘the free market’. It uncovered a yawning democratic deficit, not only in Europe, where unelected technocrats now take up the reins of power, but across the Western world. The sense is that the nation state, which emerged in tandem with democracy, is at the mercy of transnational forces, and that this, combined with independent central banks and the deregulation of the financial sector, makes politics little more than a sideshow – a convenient cover for the 1% that enriches itself at the expense of the rest, who are obliged nonetheless to bail them out when the economic weather turns inclement.
A dangerous cynicism haunts the West. Voter turnout and party membership are down; in Athens, the birthplace of democracy, neo-Nazi thugs roam the streets, looking for immigrants on whom to vent their frustrations. Even across the Mediterranean, where the green shoots of democracy were so recently and thrillingly in evidence, the forces of reaction are fighting back, amidst much dark talk of an ‘Arab Winter’. Triumphalism has turned to anxiety, self-assurance to uncertainty.
David Runciman’s The Confidence Trap, a ‘history of democracy in crisis’, is an attempt to put this anxiety into context – to identify the historical parallels between recent events and less recent ones, not in any demonstration of seen-it-all-before sanguinity, but in order to show how previous crises both prefigure and differ from the current situation, and how the fact of having come through those crises has the potential to engender a false sense of security that may undermine our ability to get through any subsequent ones. The book is thus neither a counsel of despair nor a counsel of complacency. Rather it is a description of the interplay of crisis and confidence in Western-style democracies. And while The Confidence Trap is conspicuously free from any dialectical idealism of the Fukuyama variety – its British author having no doubt decided that nothing dates as quickly as a vision of the future – it does hold out the possibility that a real crisis may synthesise with a misplaced sense of confidence, with calamitous results for the liberal-democratic model.
For Runciman, the beginning of wisdom in any discussion of democracy in crisis is to recognise that a sense of crisis is something democracies generate almost as a matter of course. Democracy is preoccupied with failure, its progress accompanied ‘by a constant drumbeat of intellectual anxiety’. But this anxiety does not necessarily bear any relation to the facts on the ground. Indeed, one of Runciman’s principal points is that democracies tend to be very bad at telling a false crisis from a real one. Even Churchill’s famous statement that democracy is ‘the worst form of government except for all those other forms that have been tried from time to time’ (‘the presiding cliché of democracy in crisis’) was itself a response to a crisis that wasn’t. The statement was made in the course of a debate on the 1947 Parliament Bill, which was introduced by the British Labour government in an effort to stop the House of Lords delaying important legislation. An innocuous bit of political business, but one Churchill took, or affected to take, as the thin end of the totalitarian wedge: ‘we approach very near to dictatorship,’ he growled, no doubt to much eye-rolling from the Labour benches. Thus, in attempting to give democracy its due, Churchill demonstrated one of its weaknesses: its tendency to overreact to unimportant events.
However, this is only half the story. For while democracies tend to make mountains out of molehills, they also tend to make molehills out of mountains; they are at once over-sensitive to imagined dangers and insensible to real ones. This is not a bad thing, necessarily: one of the strengths of democracy, writes Runciman, is precisely its ability to turn genuine crises into ‘routine moments of political uncertainty’. But while this ability can be an advantage, it carries with it a mortal danger – the danger that democracy will one day face an emergency from which its tendency to ‘muddle through’ will be unable to extricate it. Further, the more it muddles through, the more it may come to believe in its own resilience, which may cause it to underestimate, or even ignore, such an emergency. The second of these contingencies is what Runciman calls ‘the confidence trap’.
To demonstrate how these tendencies interact, Runciman examines seven key years in the history of modern democracy: 1918, 1933, 1947, 1962, 1974, 1989 and 2008. Each of these years, the author suggests, is a site of existential crisis, though the crises dealt with are not always – or not only – the ones that come most readily to mind. For example, 1962 refers not only to the Cuban missile crisis, but also to the Sino-Indian war and the official raid on Der Spiegel in West Germany. 1989 was a year of crisis precisely because it was interpreted as a victory for the West: it led liberal democracies into a false sense of confidence, thus preparing the ground for a later emergency – the one through which we are now living.
Thinking, as always, against the grain, Runciman shows that democracy’s weaknesses, or ostensible weaknesses, are often strengths. For example, he takes issue with the newly popular idea that liberal democracies are both listless and fickle – too slow to act and too quick to change their minds. In the 1920s and 1930s, the view that autocracies could ‘make the political weather’ – that their decisiveness made them better suited to the demands of crisis politics, in particular – was widespread on both the left and the right. But Runciman argues that the tendency of democracies to ‘stumble through’ gives them the edge over their rivals. Because they are not locked into any one strategy, their mistakes tend not to prove calamitous. By contrast, autocrats can admit of no weakness and are apt to dismiss, or destroy, internal criticism. The result is that they do not adapt when they need to. Here Runciman echoes Alexis de Tocqueville, who argued that democracies tend to fare better in long-term crises and autocracies in short-term ones.
One daring explication of this thesis comes in the chapter on 1962. Referring to the stand-off between Kennedy and Khrushchev, Runciman demonstrates how the emerging logic of ‘mutual assured destruction’ (MAD) made a nonsense of the conventional thinking on the relative strengths of democracy and autocracy. Hitherto, the assumption was that in matters of foreign policy the Soviet Union had an advantage over the United States, which was constrained by the ‘dead hand of public opinion’ and thus unable to act strategically or bluff its ideological rivals. In other words, to borrow two metaphors popular among journalists and strategists at the time, the belief was that the Soviet Union was better at playing both chess and poker – the Russian game and the American one. And yet, as Runciman sardonically points out, chess is not exactly chess ‘if neither side can afford to lose’ and poker is not exactly poker ‘if either side has a nuclear option’.
Indeed, one could argue that in such a situation the rational strategy is to behave irrationally and leave it to one’s more rational opponent to decide how far to push his advantage. And that is precisely what Kennedy did. Caught between the conflicting demands of avoiding a catastrophic war and looking tough in the face of Soviet threats (one detail that never ceases to amaze is that at the time of the crisis Kennedy was worried about the Democrats’ performance in the mid-term elections), he went against the advice of his ‘realist’ advisors. He made the satellite photographs of Cuba public, revealing that his administration had been duped. In doing so, he sent a message to the Soviets that he could no longer guarantee the sanity of his actions; public opinion was now a factor, and public opinion is unpredictable. Thus, another Churchillian dictum – that the greatest argument against democracy is a five-minute conversation with the average voter – turns out to have it precisely backwards. In this instance, at least, an ‘irrational’ electorate can be seen to have triumphed over a ‘rational’ dictator.
The problem, however, as Runciman sees it, is that democracy finds it almost impossible to learn from experiences such as these. It tends to view such events not as learning experiences at all, but as quasi-providential happenings – evidence, almost, of liberal democracy’s spiritual superiority over its rivals. The fact that democracy is messy and mundane saved it in 1962. And yet the lesson many drew from the crisis was that democracy had inner reserves of strength which were as imperishable as they were ineffable. In short, they took a fatalistic view – and it is precisely this fatalistic view, with its invitation to both passivity and recklessness, that Runciman sees as potentially disastrous – the psychological basis for the confidence trap. ‘People have to believe in democracy for it to work,’ he argues. ‘The better it works, the more they believe in it. But the more they believe in it, the less likely they are to know when something is wrong.’
And so we come to 1989 and the authors of our current woes, which is to say those helpful chaps who took the fall of the Berlin Wall and the collapse of communism as no more than their due – as evidence of democracy’s superiority and of the free market’s superiority, in particular – and who were thus emboldened to let Alan Greenspan and his acolytes do their thinking for them. Well, we know where all that led. But Runciman’s point is not ideological. It is that democracy, no less than communism, is apt to fall for the mistaken notion that there is a ‘right side’ of history if it loses sight of its own strengths. That its strengths are also its weaknesses serves to complicate the matter. But in essence the matter is not complicated at all; it is simply that liberal democracies tend to mistake the nature of their own success.
In his final chapter, Runciman identifies the ‘the four fundamental challenges a system of government can face: war, public finance, environmental threat, and the existence of a plausible competitor’. Needless to say, all of these challenges loom large in the collective consciousness in the second decade of the twenty-first century. But Runciman misses a trick, I think, by treating each in isolation. For surely the nightmare scenario for democracy would involve some combination of these challenges. One does not have to stretch one’s imagination too far to see how such a combination could materialise in the not-too-distant future. Nor, indeed, is it difficult to imagine how a separate and far more subtle threat – one touched upon by Runciman, though only in passing – may play a role in such a crisis. Hitherto, this threat has been rather vaguely defined as ‘the democratic deficit’, but as of today we can also speak of the problem of ‘double delegation’.
This useful term arrives courtesy of Philip Coggan, a journalist at the Economist (he writes the pseudonymous ‘Buttonwood’ column) and the author of The Last Vote, a wide-ranging and fair-minded analysis of the ‘threats to Western democracy’. In essence, double delegation describes the way in which politicians farm out decisions to non-politicians, with the result that the electorate grows increasingly sceptical of the power of politics to effect real change, and increasingly suspicious of politicians whose policies appear to protect the status quo. Leave aside the confidence trap; the danger for Coggan is that Western electorates may come to see democracy as a confidence trick – that they may lose faith in democracy as an idea and decide to dispense with it altogether.
As any history of democracy shows, the key driver of systemic change is the nature – and in particular the size – of the demos. In Athens, direct democracy was possible because the demos was limited to the free men of one city, who would meet and vote in the same physical space. But in the modern democratic period such an arrangement is impractical; the electorate is simply too vast and spread out for such a system to work. Consequently, we have evolved a form of democracy in which voters entrust representatives, or delegates, to do their decision-making for them. These delegates are expected to vote in a way beneficial to their individual electorates and in keeping with their election promises. But the effect of the representative principle is nevertheless to concentrate power in that class of citizens known as politicians.
The problem with politicians is that they are not necessarily experts in anything other than their own political survival, and so there is always a temptation to shift responsibility for important decisions to other bodies. In the last fifty years, this tendency has become especially marked in Western countries. Central banks have been granted independence, while ‘quangos’ (or ‘quasi-autonomous non-governmental organisations’) are now ubiquitous in many liberal democracies. And while the argument in favour of such non-elected bodies is always that they improve efficiency and serve to ‘depoliticise’ decision-making, it is clear that this extra stratum of delegation is imposed at the expense of the representative principle. As Coggan puts it, double delegation robs democracy of its content while keeping its form.
It also has a tendency to spread through the system. If it is now accepted practice to put economists in charge of monetary policy, why should it not also be accepted practice to put economists in charge of fiscal policy? In Europe, profligate governments have run up massive deficits, which have served to undermine confidence in the Euro. Consequently, in both Italy and Greece, economists have been brought in to sort out the mess. If politicians cannot be trusted to sort out the mess other politicians have made, what good are politicians at all? In asking this question, Coggan intends no insult to the representative principle. Rather, he seeks to instil in his readers a much-needed sense of urgency. He believes there is now a real danger that power may pass to a permanent technocracy.
Double delegation and the democratic deficit are apt to come most sharply into focus in times of economic strife. As Coggan shows, enfranchisement has tended to reflect economic power, or emerging economic power. In the nineteenth century, it was extended to the newly powerful middle class; in the twentieth century, it was extended again to the (increasingly organised) working class. His point is that political power tends to follow economic influence. While I think he oversimplifies the case when he effectively reduces democracy to a ‘pact’ between politicians and their electorates by which the latter grant the former power in return for a higher standard of living, he is surely right to say that austerity is a much tougher sell than it might otherwise be when the democratic deficit is so conspicuous.
Electorates are not enamoured of the idea that the nation state now has such limited power over its destiny. Democracies dependent on foreign creditors; massive multinational companies subject to few democratic controls; an international financial market with the power to decide the strength of currencies – these things sit uneasily with the idea that a nation should be able to determine its own fate and the fate of its people. Factor in the massive rise in inequality across the West, the perverse dynamics of ‘the bail out’ (socialism for the rich, capitalism for the rest), and a more general suspicion that financiers do not so much earn their money as make it, and one begins to see how the idea that democracy involves a conspiracy of the rich against the poor can take hold.
This idea found its most dramatic expression in the Occupy movement and it progenitors, and Coggan has some sympathy for the notion that the 1% enriches itself at the expense of the 99%. But he also says that the 99% must carry its fair share of the blame for the poor repair in which liberal democracies across the West now find themselves. Indeed, for Coggan, the undermining of trust is as much the fault of the electorate as it is of their representatives in Washington and Canberra. In his chapter on the ‘dead weights of democracy’, he upbraids the ‘Diet Coke’ generation for wanting the sweetness without the calories: for demanding both social protection programs and low taxes – a recipe for deficit – and for failing to appreciate the tough decisions that politicians have to make. Furthermore, he intuits a deepening cynicism towards politics in Western democracies – a cynicism that, to some extent, can be traced to the overblown rhetoric of politicians with little of substance to say, but that also has a life of its own.
It is here, I think, that Coggan’s thesis begins to show signs of nervous tension – brought on, perhaps, by the Economist’s habit of wanting to appear apolitical, or at any rate non-ideological. For even-handedness is not the same as a reluctance to take sides, and Coggan’s rather impertinent animadversions – at one point he actually cautions the reader that the world doesn’t owe him living; at another he calls the vote ‘a privilege’ – seem to me to underestimate the depth of the problem he has identified. Politicians are our representatives in a system that, if we follow his logic, has ceased (or is ceasing) to represent us in a meaningful way. A certain cynicism about politics is thus only natural; it may be unpleasant, but it is not misplaced. And until the major political parties address the problems analysed by Coggan, that cynicism is not going anywhere. In my view, they could start by heeding the call put out by the Canadian magazine Adbusters, ahead of the first Occupy Wall Street protests, for an inquiry into the relationship between money and politics. Such an inquiry is especially urgent in the US. From there, they might go on to consider whether what we are witnessing now is, to borrow a line from Runciman, ‘the unravelling of an extended political/economic experiment’.
I take Coggan’s point that the solutions to our current problems must be driven from below as well as from above. His idea that we should consider each vote we cast as our ‘last’ is sane, if condescendingly put. The only guarantee we have, after all, is that nothing is guaranteed (sorry, but his homely register is catching). Both Socrates and Plato regarded Athenian democracy as a chaotic and dangerous experiment, and it is only in the last 200 years or so that ‘democrat’ has ceased to be a dirty word. Moreover, in the 1930s in Europe and in the 1970s in South America, democracy took a conspicuous leave of absence. In other words, the history of liberal democracy has not been a straightforward story of progress and we must prepare ourselves for the possibility that its future may be as patchy as its past. Above all, I think we need to regard democracy not only as a means to an end, but as an end in itself. Yes, it has its flaws, but in my view it is the only system of government suited to the sophistication and restlessness, to the ingenuity and diversity, of our species. To believe in it is no bad thing, as long as the belief stops short of mere faith, which, as Runciman rightly says, is an invitation to fatalism. Contra the ‘new world order’ thesis, there is nothing inevitable about free and fair elections, a free press, competing political parties, a professionalised bureaucracy and an independent judiciary. Let us, then, arouse in ourselves a little of the spirit of self-defence.