They shaped how the West was won, but according to leading thinker on liberalism John Micklethwait, democratic systems are in the midst of unprecedented turmoil. By Leigh Sales.

Democracy on trial

Editor-in-chief of The Economist John Micklethwait.

When even democracy’s staunchest defenders fear for its future as a system of government, you know it’s time to worry. John Micklethwait, the editor-in-chief of the pro-market, classically liberal news magazine The Economist, believes the war on terror, the credit crunch, the euro crisis and the Washington shutdown have all thrown democracy into its gravest crisis in decades, if not centuries. In The Fourth Revolution, a new book co-authored with his colleague Adrian Wooldridge, Micklethwait argues that Western governments are sinking under the burden of excessive spending, dysfunctional management and self-entitled populations. The current crisis in the Ukraine and the strongarm tactics of the Russian president Vladimir Putin offer a stark example of what’s at stake. According to Micklethwait, developing nations are scrutinising the competing models of government around the world and questioning if democracy is worth the hassle. 

Leigh Sales John, expand for me on your view that so far, the 21st century has been a rotten one for the Western model of government.

John Micklethwait I think there are two sides to that. In terms of democracy, you’ve just had the European elections where you had widespread contempt and annoyance at what passes for government in Europe. You’re about to have the mid-term elections in America which will be a similarly mordant occasion. So in terms of democratic heartland, government is unpopular. Meanwhile, generally autocracies are doing rather better. You see the popularity of Vladimir Putin, you see the fact that the Chinese regime with one or two exceptions is doing generally quite well. So far if you look at most of the close calls between democracy and autocracy in the first 14 years of this century, too many of them have gone towards the autocratic end. Egypt. Places like Russia and Turkey have sufficiently worsened. I think there’s even a list that shows the number of democracies is going down. 

LS How serious is this? Is democracy in a crisis that threatens its survival?

JM I think that’s dramatic. It’s not like democracy is going to keel over tomorrow, but there are really significant dangers. One very good example is what’s happening in Europe where there’s danger that the elites are doing too much. The wretched thing about the European project is that it’s been unable to go back to voters and get any form of democratic backing really at all. The main symbol of European democracy, the European parliament, is arguably one of the most dysfunctional democratic political institutions in the world because it does not have the accountability that you need and so it’s not treated seriously by voters. On top of that, you’ve got a lot of untidiness, you’ve got too much money in politics, you’ve got the problems of gerrymandering and redistribution, particularly in America. You have the problem that because democracy appeared to win all the big arguments, it got lazy and tattered at the edges.

LS There’s a think tank in Australia called the Lowy Institute for International Policy and in its annual poll it reported that only 42 per cent of Australians aged 18-29 believe “democracy is preferable to any other kind of government”. When asked to choose between “a good democracy” and “a strong economy”, only 53 per cent chose democracy. 

JM That’s amazing.

LS Is there a complacency that’s crept into democratic populations? That we take our freedoms for granted?

JM I think there is. There’s a contradiction and it goes something like this. If you ask people who live in democracies, “Do you like your government?”, they all pretty much universally say no. Levels of satisfaction are very low, they’re pissed off about how there’s a failure to do the right things. They’re pretty straightforwardly annoyed. And yet if you say do you think there’s an alternative to democracy, they say no on the whole. They don’t tend towards that. And to believe that situation can always carry on is complacent because you’re already seeing that in the emerging world people are saying, “Well look, democracy doesn’t seem to work very well.”

LS Traditionally, we associate democracy with capitalism and consider political freedom essential for genuine economic progress. Is that still a fair assumption?

JM That’s a really good question. The answer is I still think it works best when democracy and capitalism do work together. But it’s pretty obvious when you look around the world at the moment, if you were to compare India and China, you would have quite a powerful argument in the opposite direction. If you’re a poor person in India, if you’re a business person in India, you might well have done a lot better being in the autocracy of China. On any measure, autocratic China has done better. But I think there is a strong question that while a version of autocracy might work in different types of emerging countries to speed things up, it does run into the problems of a middle class that wants to have more political rights. It’s much easier to bulldoze a tenement block in order to build a factory if you don’t have democracy. But once you have people who have rights, they object to it, probably quite rightly.

LS What sort of message does the success of that type of autocractic meritocracy send to developing nations as they look around the world at government models to emulate?

JM At the moment, I think it’s having quite a strong message, one with which I don’t agree. You only have to wander around developing nations. If you preach the virtues of democracy to somebody in Africa, to somebody in Asia, Latin America to some extent, they will say you’ve got European democracy and American democracy in nothing but a mess. Why should we want that when there seems to be this more efficient and quicker way to develop elsewhere? In terms of the book, we point out that one of the most efficient governments in the world is Singapore, an authoritarian democracy. What’s interesting though if you really dissect what the good things a country like Singapore is doing – or for that matter, Sweden or Estonia or Chile or any of these places which are doing government quite well at the moment – the stuff which really makes a difference in Singapore doesn’t tend to be the anti-democratic stuff, it’s rather mechanistic. It’s things which any democracy could do, Australia could do, Britain could do. There’s nothing in the British constitution or in Australia that says you can’t hire good teachers, pay them a lot of money if they do well and sack them if they’re bad. There’s nothing that says you can’t give many providers a chance to do healthcare well. A lot of the things that make government better are simply a matter of introducing basic management tools and making people accountable. That isn’t really, despite the free-flowing rhetoric or some might say claptrap coming out of Lee Kuan Yew and his acolytes, about Asian values and so on. I don’t think a lot of those things really are Asian. I think they’re just straightforward, just doing efficient things and getting on with it.

LS Let’s take the situation in the Ukraine and the ambitions of Russian president Vladimir Putin. Do you think the Ukraine is any sort of crunch point for democracy worldwide, and if Putin fails there, will it be a blow to non-democratic alternatives?

JM I don’t think it’s a crunch point as it will not swing things dramatically one way or the other. I think there’s some degree of adventurism in it. It’s possible that if it goes wrong for Vladimir Putin – which I think would go right for the rest of us – that could have a fairly dramatic effect on democracy in Russia. That’s one of the reasons why Putin reacted so strongly to the Ukraine because here are people doing exactly what he doesn’t want them to do. You have people protesting, people are sort of in a legitimate opposition beginning to emerge, a degree of people power. Well, if that ever happened in Russia that would be… that’s not what he wants to happen. So for Putin, it’s partly opportunistic, partly very deeply nationalistic, this idea that the Soviet Union, it was a mistake that it came apart, that it’s still Russian territory really. The last thing he really wanted to see is authoritarian democracy overthrown right on his borders because that might give Russians the wrong idea as well.

LS Should Putin be excluded from the G20 in Australia later this year?

JM I would, yes. Put him on watch. One of the problems with the West and Putin thus far is they’ve kept on saying don’t do this or we’ll do X. He’s done that thing, a bit like a naughty schoolboy, where you sometimes come close to following the letter of the law while breaking it in spirit. Which way it goes now is very difficult because if you double down on people like Putin, they tend to come back in a very strong way.

LS As we move through the 21st century, which states are going to be the most successful and what are democracies going to need to do if they want to retain the advantage?

JM The most successful states will tend to be democracies who understand the need to regenerate their government. If you look and see what happened in Sweden, I think that’s a really interesting example. That was a place that was a socialist paradise. Sweden ended up with government spending at 67 per cent of GDP. It got too big and then they had to reform and rethink. And what it ended up with is pretty good public services, nearly all free, spending as a percentage of GDP is down to 49 per cent. 

LS But 49 per cent of GDP is still…

JM It’s still high, and it’s higher than I would like, but it’s a pointer to the momentum and the way they’ve thought about it. They’ve actually asked themselves a fairly basic question: what is the state for? And it’s true, the answers they’ve come back with aren’t necessarily ones with which I agree, but I don’t see that sort of debate happening elsewhere.

LS When you write about Western governments needing to become more lean, what do you mean exactly?

JM Well, I think what you’re seeing is a succession of Western revolutions in government which are the very reason why the West got ahead of Asia. All the way back to 1588, when [English philosopher] Thomas Hobbes was born, you and I would have bet every penny we had on the idea that China represented, or possibly India, the future of government, not Europe. And yet what happened is that the European state began to establish a sort of “Goldilocks” solution, which is to have just enough order within their borders to make the state work. But at the same time they never got strong enough to dominate the entire region. So what happened was the European states competed against each other whilst the Chinese just looked inwards. The Chinese invented gunpowder and used it for fireworks and the Europeans used it to blow each other out of the water. That was the first revolution, about security. The second revolution was about liberty and efficiency and I think it’s very relevant to what’s happening today. You’ve got the French Revolution, the American Revolution. But the really interesting one to me is what happened to Britain in the 19th century. A group of Victorian liberals came in and they reduced the size of government and, by doing that, they created the first police force, schools, hospitals. They did all the things you want governments to do and they did that by ripping out everything to do with what they called “the old corruption”, which is basically cronyism. But that soon gave way to people getting worried about the need to look after people and the need to compete with Germany. And what in the end came out was the third revolution, the welfare state revolution, which is pretty much what you and I live with today. What we’ve ended up with is a state that is very sprawling, it tries to do far too much and it is overladen with regulation. We’ve ended up with a state that has considerably grown in every country, every part of the West, over the past hundred years. We’ve ended up like Augustus Gloop, the boy in Charlie and the Chocolate Factory, who wanted evermore. 

LS As Western governments have taken on more and more, what has become the attitude of their publics towards government?

JM The attitude, I would argue, is a mixture of hypocrisy and ignorance. On the whole, since Reagan and Thatcher, the idea that government is always the answer has disappeared. Everyone has this in-built fear, this idea that big government is not a good idea but, by the same token, both the left and the right keep on increasing it. The left builds schools and hospitals and gives more things to public sector workers. The right builds prisons, it builds armies, it builds up the national security state and both of them in terms of regulation, both sides are just as likely. You’re just as likely to get a call for “something must be done” from one of Mr Rupert Murdoch’s publications as you are from say The Guardian or The New York Times. So both sides have been growing this monster for a long time.

LS Isn’t big government better than too little? I think you make the point in The Fourth Revolution that it’s preferable to live in Denmark than in the Congo.

JM That’s entirely right. And that is the problem for the right. You look at America, the right’s two problems are really simple. One is the idea that government is just terrible, you ought to get rid of it. But no government at all is a pretty ghastly place. You’d rather live in Obama’s America than in the Congo. The second side of that is if you start thinking that way, you’ll never think how to make small government. The problem on the left, the Democrats, here [in Britain] the Labour Party, François Hollande in France, many European leaders have this problem of public sector unions and they face this basic question: are public services, when you have schools and hospitals, are they there to serve the poor – because the main point of public service and welfare is to help the poor – or are they there to provide jobs for public sector workers. And because public sector unions are so powerful on the left, that’s an enormous problem. So both sides come to this with problems in terms of the way they’re approaching it.

LS You’re talking about some pretty substantial reforms. The former prime minister of Luxembourg, Jean-Claude Juncker, remarked in 2007 that, “We all know what to do but we don’t know how to get re-elected once we have done it.” What politician is going to have the guts to do what you’re advocating?

JM Sweden provides one way in which that happens. You simply run out of money and you have to do something. It can be a crisis that causes this change. It can also be something more, a kind of revolution from below. I’ve talked already about people beginning to see that things work better elsewhere. I think if you look at towns and cities, you can often see at that level people beginning to experiment. We’ve seen smaller countries do it – Estonia, Chile, Sweden. There are a number of places you can look at and ask, What works there? What can we copy? What have they made do with? I think it’s also possible that some leaders will come along and embrace things. When you look back at big revolutions in government, they’ve tended to involve two things: a set of ideas beginning to emerge about how to change government and also new technology. Well, the new technology we’ve now had for quite a bit. 

LS John, how long have you been editor-in-chief of The Economist?

JM Eight years.

LS And in all your daily immersion in global issues, are you an optimist or pessimist about the future?

JM I would describe myself as a paranoid optimist. I fundamentally think the big things in the world are going in the right direction. I do think that if you look around, the economy is sort of in the right, most of the grounds for having a recovery of sorts in the West are there. I think we still have some fundamentally very strong things to do with globalisation and technology which are changing lives for the better pretty much everywhere. But I am paranoid about some things. One example is nationalism. There is nothing that is rational about what Vladimir Putin is doing. What he’s doing in the Ukraine, the reason most people find it hard to understand is that most people would not want to create chaos on their borders. Well, he does, in part for odd reasons to do with nationalism. Those sort of things make it difficult. It’s the problem of the irrational – terrorism being the ultimate example – where a lot of my worries come from.

This article was first published in the print edition of The Saturday Paper on Aug 16, 2014 as "Democracy on trial". Subscribe here.

Leigh Sales
is the anchor of the ABC’s flagship current affairs program 7.30 and the author of two books.

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