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Rejection of democracy, fuelled by inequality, creates fertile ground for authoritarianism – reforms are needed


Joseph E. Stiglitz, a Nobel laureate in economics, is a professor at Columbia University and a member of the Independent Commission for the Reform of International Corporate Taxation.

The pervasive feeling that democracy has delivered unfair outcomes has led some to conclude that alternative systems might produce better results. But rather than looking elsewhere for alternatives, we need to look inward, at our own system.

There has been much hand wringing about the retreat of democracy and the rise of authoritarianism in recent years – and for good reason. From Hungarian Prime Minister Viktor Orbán to former Brazilian president Jair Bolsonaro and former US president Donald Trump, we have a growing list of authoritarians and would-be autocrats who channel a curious form of right-wing populism. Though they promise to protect ordinary citizens and preserve long-standing national values, they pursue policies that protect the powerful and trash long-standing norms – and leave the rest of us trying to explain their appeal.

While there are many explanations, one that stands out is the growth of inequality, a problem stemming from modern neoliberal capitalism, which can also be linked in many ways to the erosion of democracy. Economic inequality inevitably leads to political inequality, albeit to varying degrees across countries. In a country like the US, which has virtually no constraints on campaign contributions, “one person, one vote” has morphed into “one dollar, one vote”.

This political inequality is self-reinforcing, leading to policies that further entrench economic inequality. Tax policies favour the rich, the education system favours the already privileged, and inadequately designed and enforced antitrust regulation tends to give corporations free rein to amass and exploit market power. Moreover, since the media is dominated by private companies owned by plutocrats like Rupert Murdoch, much of the mainstream discourse tends to entrench the same trends. News consumers thus have long been told that taxing the rich harms economic growth, that inheritance taxes are levies on death, and so forth.

More recently, traditional media controlled by the super-rich have been joined by social media companies controlled by the super-rich, except that the latter are even less constrained in spreading misinformation. Thanks to Section 230 of the 1996 Communications Decency Act, US-based companies cannot be held liable for third-party content hosted on their platforms – or for most of the other social harms they cause (not least to teenage girls).

In this context of capitalism without accountability, should we be surprised that so many people view the growing concentration of wealth with suspicion, or that they believe the system is rigged? The pervasive feeling that democracy has delivered unfair outcomes has undermined confidence in democracy and led some to conclude that alternative systems might produce better results. 

Democracies work best when the perceived stakes are neither too low nor too high.

This is an old debate. Seventy-five years ago, many wondered whether democracies could grow as fast as authoritarian regimes. Now, many are asking the same question about which system “delivers” greater fairness. Yet this debate is unfolding in a world where the very wealthy have the tools to shape national and global thinking, sometimes with outright lies (“The election was stolen!” “The voting machines were rigged!” – a falsehood that cost Fox News $787-million). 

One of the results has been deepening polarisation, which hampers the functioning of democracy – especially in countries like the US, with its winner-take-all elections. By the time Trump was elected in 2016 with a minority of the popular vote, American politics, which once favoured problem-solving through compromise, had become a bald-faced partisan power struggle, a wrestling match where at least one side seems to believe there should be no rules.

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When polarisation becomes so excessive, it will often seem as though the stakes are too high to concede anything. Rather than looking for common ground, those in power will use the means at their disposal to entrench their own positions – as the Republicans have done openly through gerrymandering and measures to suppress voter turnout.

Democracy by design

Democracies work best when the perceived stakes are neither too low nor too high (if they are too low, people will feel little need to participate in the democratic process at all). There are design choices that democracies can make to improve the chances of hitting this happy medium. Parliamentary systems, for example, encourage coalition building and often give power to centrists, rather than extremists. Mandatory and ranked-choice voting also have been shown to help in this respect, as does the presence of a committed, protected civil service.

The US has long held itself up as a democratic beacon. Though there has always been hypocrisy – from Ronald Reagan cozying up to Augusto Pinochet, to Joe Biden failing to distance himself from Saudi Arabia or denounce the anti-Muslim bigotry of Indian Prime Minister Narendra Modi’s government – America at least embodied a shared set of political values.

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But now, economic and political inequality have grown so extreme that many are rejecting democracy. This is fertile ground for authoritarianism, especially for the kind of right-wing populism that Trump, Bolsonaro, and the rest represent. But such leaders have shown that they have none of the answers that discontented voters are seeking. On the contrary, the policies they enact when given power only make matters worse.

Rather than looking elsewhere for alternatives, we need to look inward, at our own system. With the right reforms, democracies can become more inclusive, more responsive to citizens, and less responsive to the corporations and rich individuals who currently hold the purse strings. But salvaging our politics also will require equally dramatic economic reforms. We can begin to enhance the well-being of all citizens fairly – and take the wind out of populists’ sails – only when we leave neoliberal capitalism behind and do a much better job at creating the shared prosperity that we acclaim. DM

Copyright: Project Syndicate, 2023.


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  • Johan Buys says:

    The problem with quoting inequality stats is that while it makes for good press to point out that 0.1% of people own 80% of wealth, the people forget about the Law of Big Numbers.

    If one confiscated ALL the wealth of the richest ten persons and distributed it among 7 billion people you’d have bumped the 7 billion people far less than a month of US minimum wage at MacDonalds.

    Do that to next 90, then next 900, then next 9000 filthy rich : the needle still hasn’t moved. The richest 10,000 don’t approach global domestic product for a day.

    Numbers at the scale of country economies and total populations make individual filthy rich pedestrian.

    • Steve Davidson says:

      Who’s talking about confiscating all the wealth? What he’s quite rightly talking about is getting the power away from these charlatans whose use their money and power to keep the poor poor, and then – like Trump or Johnson – make out they’ll fix it by lying through their backsides. Stiglitz is completely right. What he didn’t mention are the religious types, especially the evangelicals, who already believe in a book of fairy tales and suck up that nonsense just like Goebbels said they would – the bigger the lie, the more fervently people believe it!

  • Cheryl Siewierski says:

    Hear, hear! Well said. I am a South African currently living in the US, and the politics here pretty much terrifies me, but I see similar hard-position tendencies creeping into the SA context too. We absolutely have to start building stronger (social) democracies to end the consequences of unchecked capitalism. On paper, South Africa seems to have many of the formal and regulatory systems for making this happen (such as funding transparency, an independent electoral board, an independent judiciary – all supported by a smashingly good Constitution) that the US could potentially adapt for use (assuming there is a snowball’s chance of anything as big passing in a bipartisan way). It also has a rather more measured (on the whole) media landscape. In practice though, we have failed to get many of the top dogs to respect and enforce those systems, we have far too many voters who opt out of participation in elections, and the most frequent winners of political hate-mongering are those populist appeals to the poorest in society. False promises leading to – as you point out – even worse results and ever-widening wealth gaps.

  • Dear Mr. Stiglitz,

    I would like to express my heartfelt gratitude for your insightful article titled “Rejection of democracy, fuelled by inequality, creates fertile ground for authoritarianism – reforms are needed.” Your expertise as a Nobel laureate in economics and your role in the Independent Commission for the Reform of International Corporate Taxation make your perspective on this issue highly valuable.

    Your emphasis on the importance of addressing inequality and unfair outcomes within our democratic system is both timely and crucial. It is disheartening to witness the erosion of trust in democracy, as some individuals seek alternative systems in the hope of achieving more just results. Your call to look inward and initiate reforms within our own system is a powerful reminder that change starts from within.

    Your article has shed light on the potential consequences of rejecting democracy and the fertile ground it creates for authoritarianism. By highlighting the need for reforms, you have provided a beacon of hope and a path towards a more inclusive and equitable society.

    Once again, thank you for your thought-provoking article. Your insights have not only deepened my understanding of the issues at hand but also inspired me to take action towards positive change.

    With sincere appreciation,
    Turki Faisal Al Rasheed

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