Latin American Populism in the Twenty-first Century
The U.S. State Department has a Bureau of Democracy, Human Rights, and Labor whose purpose is to "promote democracy as a means to achieve security, stability, and prosperity for the entire world" and "identify and denounce regimes that deny their citizens the right to choose their leaders in elections that are free, fair, and transparent." The Bush administration has already promised to bring democracy to Iraq after Saddam Hussein is ousted. And Americans regularly condemn China for being undemocratic and praise Russia for its democratic advances. Democracy is the way Americans distinguish the good guys from the bad, those regimes worth supporting from those not, and it is the first remedy prescribed for any country whose practices are disliked. But Fareed Zakaria, editor and columnist at Newsweek International, argues in The Future of Freedom that many developing societies initially fare best under what he calls "liberal authoritarian regimes," and that "what we need in [American] politics today is not more democracy but less."
Zakaria's provocative and wide-ranging book is eminently worth reading. If not entirely persuasive when dealing with contemporary American politics, he is correct that Americans' obsession with electoral democracy has clouded their understanding of countries such as Russia, China, and South Korea and led at times to disastrous policy choices. This case has been made before, but never as simply and clearly. His book displays a kind of argumentation, grounded in history and political philosophy, of which there is precious little these days, particularly among opinion columnists.
CHAD, NOT CHADS
Zakaria's argument pivots on a distinction between constitutional liberty and democracy. He defines the former as the protection of individual rights of speech, property, and religion through a system of law not subject to arbitrary government manipulation. This phenomenon developed gradually over time, he argues. Imperial Rome had a system of law, but not constitutional liberty. England gained rudimentary constitutional liberties after the Magna Carta in 1215, and the United States was founded as a system of constitutional liberty in 1788.
Zakaria defines democracy, in contrast, as a political system based on "open, free, and fair elections." In 1830, the United Kingdom had constitutional liberty but was not a democracy: only two percent of the population was eligible to vote. The United States became a full-fledged liberal democracy after women won the vote in 1920 and blacks were guaranteed access to the polls in 1965, and now most of Europe consists of liberal democracies also. Singapore today has liberty, but not democracy. Russia, on the other hand, has elections, but under Vladimir Putin it is tossing out some of the constitutional liberties it acquired after the fall of communism.
Zakaria argues that the best way to turn developing countries into liberal democracies is by fostering constitutional liberty rather than democracy. If electoral democracy is established in a society before it has achieved constitutional liberty, it is likely to either end up as an "illiberal democracy" (like Russia) or degenerate into fascism or populist authoritarianism (as Germany and Italy did between the world wars). He speculates that if elections were held now in many Middle Eastern or North African countries, they would be won by fundamentalist parties that would proceed to destroy whatever modicum of liberty exists and probably eliminate future elections as well.
Zakaria's role models are countries that first created a strong constitutional liberal infrastructure, often under a liberal authoritarian regime. They include South Korea, Taiwan, Chile, and Singapore. Before South Korea and Taiwan instituted elections, many American liberals denounced them for their lack of democracy, and Singapore's government is still in disfavor.
His object lessons of what happens when democracy is forced on a country prematurely are Russia and Indonesia, where the United States and the International Monetary Fund (IMF) made elections a condition of economic assistance during the late 1990s. In the great Russia-China debate over which should come first, political reform or economic reform, Zakaria sides most definitely with the Chinese.
What makes constitutional liberty possible? Zakaria is most persuasive in arguing that it is the development of autonomous institutions within society that are not beholden to state power -- and most important, those institutions of property that are created by the development of capitalism. He writes, "If the struggles between church and state, lords and kings, and Catholics and Protestants cracked open the door for individual liberty, capitalism blew the walls down." Market capitalism, not wealth per se, creates an independent bourgeoisie that upholds the universal rule of law as a protection against feudal state power.
Centuries ago, capitalism and constitutional liberty failed to take root in poverty-ridden subsistence economies, but today, Zakaria argues, the most inhospitable circumstances are found in countries that have significant access to unearned wealth -- be it from oil revenues in Saudi Arabia or from canal revenues in Egypt. He calls these "trust fund" societies. The ruling class lives off the rents it collects, which it also uses to buy off the citizenry. These societies lack an independent, entrepreneurial middle class, which could provide the basis for constitutional liberty. Their problem, Zakaria concludes, "is wealth, not poverty."
The solution, he argues, is to force them to devote their unearned revenues to popular education and economic development. That won't be easy in Saudi Arabia, but Zakaria cites the case of Chad as an example of what should be done. In exchange for helping Chad develop its oil fields, the World Bank stipulated that 80 percent of the revenues be spent on health, education, and rural infrastructure, 5 percent be spent on people living near the oil fields, and 10 percent be left in escrow for future generations -- leaving the government only 5 percent to spend on itself.
Zakaria does not comment specifically on the prospects of democracy in a post-Saddam Iraq, but the implications of his analysis are clear. If the United States invades and tries to move Iraq toward democracy, it will face two major obstacles: group rivalries and oil. What Zakaria writes of the Balkans could easily apply to a future Iraq: "The introduction of democracy in divided societies has actually fomented nationalism, ethnic conflict, and even war." And Iraq's oil reserves, the second largest in the world, could encourage another oil autocracy like Saudi Arabia if the revenues are not distributed on the model of Chad. To create a liberal democracy in Iraq, the United States and the international community will have to figure out a way to keep communal tensions in check while devoting the bulk of the country's oil revenues to the development of a middle class that is not tied to the state or to oil -- not an easy task.
THE REVOLTING MASSES
In the second part of The Future of Freedom, Zakaria argues that the United States suffers from an excess of democracy, which is threatening liberty. The analysis appears to come full circle -- liberty leads to democracy and democracy ends up undermining liberty, prompting him to call for "a restoration of balance" between them. But when Zakaria writes about liberty and democracy in this section, he uses different definitions, and his analysis is less persuasive.
Liberty now refers to the conditions that accompanied the creation of constitutional liberty in the United States: delegated power, representative rather than plebiscitary government, checks and balances on majority rule. Zakaria identifies these Madisonian constraints on direct democracy with liberty. Yet these do not exist in the same fashion in Singapore or Hong Kong, and are not equivalent to, nor essential ingredients of, what Zakaria describes as constitutional liberty elsewhere in the book.
Democracy, meanwhile, is now talked about in terms of "democratization," which includes not only the extension of suffrage, but also the breakdown of hierarchies and traditional authority, the opening up of closed systems through deregulation, and "pressures from the masses." Democratization means the displacement of high culture by blockbuster movies, romance novels, and commercial art. (When he writes about culture, Zakaria sounds like the early-twentieth-century Spanish philosopher and "mass society" theorist Jose Ortega y Gasset.) In politics, it means the replacement of the party system with presidential primaries and referenda, and of the independent think tank by the policy group that is in fact a lobbying organization. In business, it is associated with "marketization" and means pension funds, credit cards, advertising by lawyers, and products geared to mass markets.
Zakaria argues that democratization in the political arena has created "an ever growing class of professional consultants, lobbyists, pollsters, and activists. ... By declaring war on elitism, we have produced politics by a hidden elite -- unaccountable, unresponsive, and often unconcerned with any larger public interest." He attributes congressional gridlock to the elimination of congressional hierarchies by the reforms of the early 1970s. He laments the decline of the independent professional in business, which became evident during the recent financial scandals.
Zakaria believes these ills could be remedied by "reintegrating constitutional liberalism into the practice of democracy." He proposes organizations by which professionals can police themselves and advocates the spread of delegated institutions such as the Supreme Court, the Federal Reserve Board, and the Military Base Closing Commission, which are accountable to the public but distanced from partisan and lobbying pressures.
Most of the problems Zakaria cites are genuine, and some of the solutions he suggests make sense. Nonpartisan commissions, which originated in the Progressive Era, have been useful in finding solutions to politically charged issues such as military base closing, and in the early 1980s, Social Security. But they, too, have sometimes been politicized. George W. Bush's Social Security commission, for instance, was stacked with proponents of the administration's plan for privatization. And self-policing certainly didn't work well with the accounting profession.
One problem with this part of Zakaria's analysis is the relationship he draws between democratization and Madisonian liberty, on the one hand, and democracy and constitutional liberty on the other. Democratization certainly has a core meaning that corresponds to democracy. Expanding the vote for blacks in the South involved democratization and was a victory for democracy. So was establishing the Food and Drug Administration and the Environmental Protection Agency, which put some private economic decisions under public oversight.
But Zakaria's concept of democratization also includes deregulation – the removal of restrictions on the private behavior of law firms or accountants. Deregulation pertains to liberty, not democracy. Marketization -- the spread of capitalism into areas dominated by production for use -- is also not democracy, but either an element of liberty or, as he argues in the first section of the book, a precondition of it. Thus it does not follow that all the ills stemming from democratization are caused by too much democracy; the problem could just as easily be too much liberty.
The other problem is that Zakaria does not always put things in historical context, leading him to blame too much democracy for ills that might have other causes. The influence of special-interest groups on politics is not new, and was not brought about by recent election reforms. If anything, special interests today probably have less influence over the political process than they did in the late nineteenth century, as chronicled in Mark Twain and Samuel Dudley Warner's classic The Gilded Age. And congressional deadlock did not emanate from the reforms of the 1970s; James McGregor Burns' 1963 book The Deadlock of Democracy was about the supposedly halcyon days of the 1950s.
Zakaria argues that in trying to democratize politics, the campaign finance reform bill of 1974 created new unaccountable power brokers and forced politicians to devote all their time to fundraising and "ceaselessly appeas[ing] lobbies." But he leaves out a crucial part of the story. The 1974 reforms limited not only the size of contributions, but also how much politicians could spend. If the original law had held up, politicians would not have had to spend all their time raising money, nor be inordinately dependent on fundraisers and lobbyists. But in 1976, the Supreme Court, one of Zakaria's favorite delegated institutions, ruled in Buckley v. Valeo that money was speech and that Congress could not limit how much a politician could spend. As a result of this decision, politicians do have to spend all their time raising money and have become dependent on fundraisers and lobbyists to help them. Here the Supreme Court was defending liberty, not democracy, and was trying to thwart democratization.
The problem of campaign finance reform goes back to the early twentieth century. The system of constitutional liberty, which protected property rights, had led to growing economic inequality. Political democracy was supposed to compensate for this by allowing each citizen an equal vote. But when large property owners began using their wealth to finance political campaigns, the growing inequality of the property system corrupted the democratic political system. Campaign finance reforms, beginning with Theodore Roosevelt's 1908 measures, were intended to restore equality to the political system by protecting it from the property system.
Something similar happened to the initiative and the referendum -- Progressive Era efforts at democratization that Zakaria claims led to less democracy. These reforms were initially devised in response to corrupt business control of state legislatures. Americans, primarily in the Western states, used initiatives to regulate railroad freight rates, establish presidential primaries and the direct election of senators, give women the vote, and adopt workers' compensation and the eight-hour workday. But beginning in the 1920s, businesses and the wealthy began using initiatives to promote their own, more conservative ends. Like the campaign-finance reform efforts, initiatives and referenda were undone largely by the superior power of business, which turned them away from the ends they were supposed to serve.
American democracy did indeed originally flourish, as Zakaria argues in the first part of his book, on the basis of constitutional liberty. And in the opening decades of the nineteenth century, Americans assumed that the two would always complement each other: liberty of property would lead to the diffusion of small property holdings, which would in turn reinforce the foundations of political democracy. But it didn't turn out that way. The yeoman farmer was replaced by the wage-earner, and the small manufacturer and craftsman by the large corporation. By the early twentieth century, the inequality of the property system was subverting political democracy, a situation that has led to a century of efforts to reverse the trend. Some of these reforms did overreach, but often they were simply infected, distorted, or overwhelmed by the very forces they were designed to counteract.
The cycle of liberty and democracy in the United States has thus not been the one that Zakaria describes in the second half of his book. Constitutional liberty did lay the foundations for liberal democracy, but the unimpeded growth of free enterprise, based on liberty of property, has started to erode these foundations. Zakaria is utterly right about Russia, Indonesia, and Iraq. Without constitutional liberty, too much democracy can lead to disaster. The United States, however, has a different problem. It still has too little.