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The Evaporation of Democracy

(Image: Hands together via Shutterstock; Edited: JR/TO)

Democracy is evaporating. In our globalized world, new forms of colonization are emerging, and popular control over decisions that affect people’s freedom and well-being is becoming increasingly weaker. This can and must be stopped.

Democracy is primarily popular control. More precisely, democracy consists in people collectively having control over decisions that affect their well-being and their freedom. The more that people are collectively able to constrain and direct decisions that affect their well-being and their freedom, the more democracy there is. And the more that this control is equally shared among people, the more democracy there is. True democracy requires strong and equally shared popular control over the decisions that affect people’s lives.

Large corporations constitute a new form of colonial power.

True democracy is a demanding ideal, and no current democratic country is a true democracy. In fact, it can be argued that all contemporary democracies are relatively far from the ideal of true democracy. But one main problem nowadays is that many democratic countries are moving further and further away from this ideal. In many places, people’s control over the decisions that affect their well-being and freedom is becoming weaker than it was just a few decades ago. Democracy is evaporating.

This is due to many factors. With the increasing globalization of economic processes, many important decisions affecting the freedom and well-being of people living in one country are taken by the politicians, judges or bureaucrats of another country. For example, in recent years German politicians have taken important decisions affecting the lives of Greek people, and obviously it is virtually impossible for the people of Greece to exercise popular control over the actions of German politicians. Similarly, in recent months a federal judge in New York has taken important decisions affecting the lives of Argentinian people, and it is virtually impossible for the people of Argentina to exercise popular control over the actions of US federal judges.

In some ways, there is nothing new here. We know from looking at the history of humankind that, through colonization and war, a small number of people in one region of the planet can have an enormous negative impact on the freedom and well-being of a large number of people in another region of the planet. However, one would not expect what applied to colonies to apply to independent democratic countries. Nowadays, new forms of implicit colonization seem to be emerging, which has resulted in the weakening of popular control in countries that are routinely classified as democratic.

Another factor responsible for the evaporation of democracy is the increasing number of very large corporations. According to data collected by the Transnational Institute, of the top 100 economies in the world, 60 are nation states and 40 are corporations. If one compares company revenues and the gross domestic product (GDP) of nation states, companies like Shell and Walmart turn out to be bigger than Austria, Argentina, South Africa, Greece, Ireland, Portugal and many other countries. Corporations make many decisions that have an important impact on people everywhere. Yet, popular control over the actions of corporations is almost nonexistent.

Corporations can move their resources and their headquarters from one country to another whenever the local legislation does not suit their profit-maximizing purposes. Moreover, the enormous economic resources they control can be used for effective lobbying, so that, even in democratic countries, elected representatives and the regulators they appoint often end up advancing the interests of corporations, which often conflict with the interests of ordinary people. This is one of the main elements of the oligarchic capture of contemporary representative democracies.

Large companies – and large corporate entities more generally – have always had much political power. But the increased corporatization of the global economy seems to have taken this to new levels, resulting in a substantial contribution to the evaporation of democracy in countries where, at least for a few decades during the second half of the 20th century, some relatively robust form of popular control had previously existed. Large corporations constitute a new form of colonial power.

Bailouts Lead to Austerity

A related factor concerns those banks and financial firms that are, supposedly, “too big to fail.” After the 2008 financial crisis, and under pressure from the financial sector itself, many governments in democratic countries used public money to rescue big banks and financial firms. The rationale was that such bailouts were necessary to avoid the collapse of the banking and financial system, which would have produced terrible consequences for ordinary people. The bailouts led to an increase in public debt, and this in some countries was used as an excuse for pursuing austerity policies and cuts to public spending, which had terrible effects on the lives of millions of people.

Financial markets should be constrained so as to maximize the benefits for society rather than constrain society to maximize the benefits for the markets.

Many analysts pointed out that, even if necessary, the bailouts could have been carried out differently. Under pressure from the financial sector, the bailouts were conducted in ways that maximized the benefits for the financial sector itself, without regard for the interests of the ordinary citizens who were paying for the bailouts. There was no effective popular control over these decisions: The people were not allowed to interfere. One dramatic example of this dynamic is the Irish banking crisis. Despite the fact that the details and the mechanisms differ from case to case, similar things happened in other democratic countries. Big banks have always had a lot of political power, but the financialization of the global economy is creating a new and extremely dangerous version of this phenomenon. As a result, democracy is evaporating fast.

Decisions “Too Urgent” and “Too Complex”

The bank bailouts also illustrate two strategies that governments in democratic countries are using more and more frequently. One consists in claiming that this or that particular decision – such as saving some private financial institutions from bankruptcy – needs to be taken urgently, due to a state of emergency, and so unfortunately, there is no time for properly consulting the people. The other consists in claiming that the details of a decision – for example, the best way to use public money to stabilize important financial institutions – are too complex for the people to understand. The people should keep quiet and let others decide.

We can call these two strategies emergencization and technocratization of politics. They are both strategies for screening political decisions from popular control. In some respects, they are age-old strategies of rulers everywhere, democratic and nondemocratic. But now, in a new and perfected form, they are used on a daily basis in contemporary democratic regimes, often without proper justification.

Governments are becoming increasingly willing to give priority to the financial markets in political decision making and not just when the financial markets are in turmoil. German Chancellor Angela Merkel has, on a variety of occasions, been explicit about this: The needs of the financial markets should be taken as constraints on the decisions of democratically elected executives and parliaments.

An alternative view is that the interests of ordinary citizens – independently of the existence and of the size of their financial assets – should have priority over the profit-seeking desires of the financial markets. On this alternative view, the financial markets should be constrained so as to maximize the benefits for society rather than constrain society to maximize the benefits for the markets. But Merkel and many other rulers of contemporary democracies seem to prefer the evaporation of democracy to regulating the capricious behavior of the financial world.

When popular control is reduced – or worse, annihilated – someone else’s power is augmented.

Yet another factor responsible for the evaporation of democracy is the internationalization of politics. Increasingly, important decisions affecting people’s lives are being taken at an international level: The International Monetary Fund; the World Trade Organization; the G20; the G8; the European Parliament, Council, Commission, and Central Bank; along with many others. These international decision-making bodies differ from each other in many respects, but in all cases, popular control over them is virtually nonexistent. Because of the number of people involved (and other factors), popular control at an international level is incredibly difficult to obtain and exercise.

Transfer of Sovereignty in Europe

The European case is striking. The transfer of sovereignty from national to European institutions has resulted in a drastic and incredibly fast weakening of popular control over political decision-making in the European Union. Many members of the EU were countries where popular control over politics was strong, at least if compared with what was happening elsewhere in the world. Now, due to the transfer of sovereignty, this is no longer true. An important component of this is the transfer of monetary sovereignty, which was generated by the adoption of the Euro and the process that led to it.

In Italy, Spain, Ireland, and other countries of the so-called “periphery” of the Eurozone, the common currency has virtually annihilated any form of popular control over economic policies. Democracy in Europe, and in the Eurozone in particular, has evaporated much faster than anywhere else. The European Union, which in the minds of many ordinary EU citizens was a democratic dream of peace and cooperation, is choking European social democracy to death.

This is epitomized by the Greek referendum on the Eurozone bailout deal, which was never held. In 2011, Greek Prime Minister George Papandreu first proposed and then cancelled the referendum. He cancelled it under pressure from those European countries and investors that had lent irresponsibly to Greece and wanted to make sure that the rescue deal properly safeguarded the interests of the lenders rather than those of the Greek people.

The Greek people were not given a say on the terms of the deal and on the draconian austerity measures the deal imposed on them. Unsurprisingly, the deal brought genuine misery to the lives of many Greeks.

Popular control can deteriorate. Democracy can evaporate. Democracy can expire. But power does not disappear. When popular control is reduced – or worse, annihilated – someone else’s power is augmented. The evaporation of democracy is increasing the power of those who control and profit from big corporations and financial firms. It is also increasing the power of politicians, regulators and bureaucrats, who can – always more freely – pursue their own interests by furthering the interests of the economically super-powerful, rather than those of ordinary people.

All of the examples that we have offered can be, and have been, contested. For each particular case, you can easily find someone who will argue that, once you look at the tiny details, it is not really true that the decision in question was taken undemocratically. Unsurprisingly, these people often have something other than popular control in mind when they talk about democracy. They have in mind procedures that do not guarantee any form of genuine popular control.

What we can observe from a bird’s-eye view is striking. Once we abstract away from details and unhelpful procedures, we see the same general pattern repeating itself again and again. Things that initially seem disconnected suddenly reveal themselves as versions of the same phenomenon: the evaporation of democracy.

Democracy is evaporating. Democracy is expiring. But it need not be. The evaporation of democracy can and must be stopped. The people can seize back the power that legitimately belongs to them.

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