Democracy and Dystopia: Part One
The problem with intangible capitalism
Despite initial triumphalism, the post-Cold War growth of intangible capitalism, divorced from the concerns and values of democratic nation states, has left western democracies facing economic, social and existential crises.
At the end of the Cold War, Western democracies emerged as the wealthiest and most powerful states the world had ever seen. Four decades later, in the wake of a global pandemic, they were hugely indebted, self-loathing states, riddled by fears of migration and disease and beset by identity crisis. What went wrong?
One answer might be hubris. In 1989, a triumphant West assumed the globe was en route to a secular, liberal democratic, international order. Tony Blair, one of the more enthusiastic proponents of this triumphalism, observed in 2010 that ‘for almost twenty years … the West set the agenda’. (1)
Following the collapse of Soviet-style communism, it was all too easy to believe that the West’s model of liberal democracy and free-market capitalism, supported by a clear set of US-sponsored international rules, would spread to the four corners of the earth. Ultimately, however, ‘this proved to be nonsense’. (2) How did the triumph of the western-model unravel? And what remains of it in the wake of both financial meltdown and the massive debt which democracies accumulated when they opted to lock down once-open societies in response to the Covid-19 pandemic?
The globalization dilemma
At the turn of the millennium, the Washington consensus held that the democratization of technology, finance, and information would drive international integration. Globalization created a new global power source- the ‘Electronic Herd’. The herd comprised ‘the faceless stock, bond and currency traders’ pioneering exciting new financial products, like derivatives. It rewarded, with investment capital, countries that put on a ‘Golden Straightjacket’ of deregulation. (3)
Western capital went in search of cheap, emerging-market labour and found the ‘most efficient low-cost producers’, mainly in Asia. (2) The best way to achieve rapid increases in living standards was to follow the market. States either got on board the global highway to a borderless, liberal democratic future, or found themselves consigned to failed statehood, where only crime and terror flourished.
The consequences were staggering, but not quite what the borderless world enthusiasts anticipated. The lazy assumption that, with the Cold War over, the rest of the world would embrace supposedly universal truths associated with liberal democracy proved an illusion. By the second decade of the twenty-first century, many countries, notably China and Russia, had done no such thing.
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