Economists talking about democracy

Our Edinburgh correspondent has been at large around the city's Book Festival, where a feature of this year's programme has been distinguished economists talking about democracy - namely Yanis Varoufakis, Kamal Ahmed, Yascha Mounk and David Runciman

The events lived up to expectation.  The esteemed panelists, authors all, provided interesting perspectives on a subject close to our hearts. 

More pertinently the events lived up to hope. It gladdened my radical democratic heart to hear several unprompted endorsements of more participatory, more deliberative democratic processes.

Perhaps this open mindedness to alternative democratic ideas has been prompted by clear and present threats to a democratic system and to institutions of democracy that belong to a previous century.

Political, economic and technological threats to democracy

Yascha Mounk and David Runciman discussed the rise of authoritarianism as a self-conscious regime type, bringing with it the suppression or eradication of legitimate disagreement.

"Either you are with me or you are against the people."

And they noted that the time taken for these regimes to put down roots is decreasing - ten years in Hungary, just two years in Poland, possibly (but not probably) by the end of a second term of a Trump presidency, should that come to pass.

Mounk set out the Hobson's Choice before us. Either democracy without rights in emergent illiberal democracies, or rights without democracy in our supposedly representative systems, where public opinion is not turned into policy.

Yanis Varoufakis echoed this idea of rights without democracy, this idea that what we call democracy is actually undemocratic, in that power does not rest with the people.

"We have all coalesced, despite our differences and idiosyncrasies, around the idea of democracy as something good and wholesome and worthwhile. But democracy is hardly ever present in our societies, especially those that call themselves democratic."

The horse of democracy is hitched to the wagon of capitalism, or vice versa. You can't discuss one without the other, especially if you are an economist. And, if the principles and institutions of capitalism are called into question, then the system we call democracy suffers by association, inviting serious consideration of alternatives.

According to  David Runciman:

"The moral legitimacy of capitalism is being eroded, which is a big issue for the 20th Century institutions of capitalism in the 21st Century. Napoleon said, 'To understand the man you have to know what was happening in the world when he was twenty.' Today's twenty year olds roll their eyes at the idea of capitalism."

Yascha Mounk linked capitalist economic factors to political and technological issues.

"The factors causing this mid-life crisis of democracy are the stagnation of living standards, the fact that diversity is being seen as a threat by a growing number of people, and technological change."

New(ish) technology has a lot to answer for in economic circles. Here is David Runciman again:

"Democracy has both problem solving and dignity enhancing (voice giving) powers. It works best when these properties overlap. The impact of technology is to pull them apart."

Varoufakis talked about the "techno-financial complex" and how it came tumbling down in 2008  under the weight of its own hubris. He described how these instruments of oligarchic power are responsible for a range of manufacturing activities that are every bit as damaging as those of the military-industrial complex.

  • Manufacturing prices (global corporations and their cartel behaviours)
  • Manufacturing desires (marketing and propaganda)
  • Manufacturing money (the wanton, irresponsible proclivities of the bankers)
  • Manufacturing consent (the media)

That is a snapshot of the bleak political and economic context for democracy in the 21st Century. However, this ostensibly hostile environment could provide fertile conditions for more enlightened democratic ideas to germinate and flourish...



Imagining and embracing new forms of democracy

David Runciman said something quite profound as he turned his attention from political and economic problems to democratic solutions.

"Maybe we need forms of democracy that don't feel democratic."

Maybe a democracy that works in 2018 and beyond will challenge the conventions and the received wisdom of democracy as we know it. It won't keep citizens at arm's length. Its policies will be made in the name of the people, not as a favour to campaign donors. Maybe it won't even use elections.

"The 21st Century is about localism and democracy you can touch."

So said Kamal Ahmed, whose sentiments were echoed by Runciman as he expanded on his ideas for new forms of democracy:

"Our imagination is closed to how democracy can be applied, including radical local forms."

Across four separate events, with four individual economists, there was a shared sense that perhaps the best way to reboot democracy will be from the ground up, at a local level, putting power back into the hands of the people, and reclaiming the true meaning of democracy in the process.

Here are some excerpts from Varoufakis, on his feet, without notes, delivering a stirring thirty five minute sermon on democracy from first principles:

"In ancient Athens power rested with the poor, for the only time in history. Ever since, the aristocracy and the oligarchy have made what we call democracy an exercise in keeping the demos out of the democratic process. We need democratic reform that will address the issues of private debt, public debt, poverty, and the lack of investment in things that really matter, such as climate breakdown. We need to storm the castles of the institutions of our democracies and make them work for the demos. We need political change that puts the many back in control of their lives."

I had a short conversation with Mr Varoufakis as he signed my copy of Adults In The Room, the non fiction thriller about his brief time as the Finance Minister of Greece, which gives all the gory detail of his encounters with the political and financial establishment in Brussels and Berlin. We talked about citizen assemblies and random selection, and, as he shook my hand, he admitted, "I want to be an anarchist, but I'm not allowed."

An anarchist maybe, but a true, radical democrat definitely. A champion of the demos, a fan of citizen participation. All four economists were interesting, insightful and genuinely concerned for a future that works for ordinary people. But Varoufakis gets the last word, with his Greek-style rejection of individualism in favour of deliberation:

"The only way to understand yourself is through your reflection in the eyes of the other, the person you are having a conversation with."