The Retreat of Western Liberalism

by Edward Luce

Belief in an authoritarian version of national destiny is staging a powerful comeback. Western liberalism is under siege.

Since the turn of the millennium, and particularly over the last decade, no fewer than twenty-five democracies have failed around the world, three of them in Europe (Russia, Turkey and Hungary). In all but Tunisia, the Arab Spring was swallowed by the summer heat. Is the Western god of liberal democracy failing?

The downward pressure on the incomes of the West’s middle classes in the coming years will be relentless.

We are taught to think our democracies are held together by values. Our faith in history fuels that myth. But liberal democracy’s strongest glue is economic growth.

The past also tells us to beware of the West at times of stark and growing inequality. It rarely ends well.

As you read these pages, please bear in mind that Brexit was not destined to happen. Holding the referendum was a rash throw of the dice by an instinctively tactical British prime minister.

Hobson’s prescience is worth savouring: ‘China, passing more quickly than other “lower races” through the period of dependence on Western science and Western capital, and quickly assimilating what they have to give, may re-establish her own economic independence finding out of her own resources the capital and organising skill required for the machine industries and . . . may quickly launch herself upon the world-market as the biggest and most effective competitor, taking to herself first the trade of Asia and the Pacific, and then swamping the free markets of the West, and driving the closed markets of the West to an ever more rigorous Protection’.

Since 1970, Asia’s per-capita incomes have increased fivefold.4 Even in Africa, the world’s worst-performing continent, incomes have almost doubled. The West’s median income, meanwhile, has barely shifted in the last half-century.

Mongol China delivered the Black Death, which wiped out between a third and a half of Europe’s population within three years. Here, too, the impact was complex. As the more urban civilisation, the Islamic world was dealt an even worse fate by the bubonic plague, since its people were more concentrated and so more exposed than those in Europe.

The most important example of this is how we think about economic growth in the West. We still measure our health in aggregate numbers. But averages are useless. As Robert H. Frank, the Cornell economist, points out, on average we have about 1.9 legs each, because some people have only one leg.14 Likewise, if Mark Zuckerberg joins your neighbourhood football team, every member is on average a billionaire.

Today, the US median income is still below where it was at the beginning of this century. Clearly what the typical American understands by growth differs greatly from that of macroeconomists. GDP numbers insist we are doing well, at a time when half the country is suffering from personal recessions.

The top 1 per cent’s share of the global economy is 15.7 per cent. But if you measure their net wealth, and provide reasonable estimates of what they have salted away in hidden corners, such as the offshore financial havens of the Caribbean and elsewhere, their share jumps to almost a third of global wealth.

The world’s wealthiest subset – the 1426 richest individuals on the planet – are worth $5.4 trillion, which is roughly twice the size of the entire British economy and more than the combined assets of the 250 million least wealthy Americans.

To be clear: the West’s souring mood is about the psychology of dashed expectations rather than the decline in material comforts.

Robert H. Frank monitors something called the Toil Index – the number of working hours it takes a median worker to pay the median rent in one of America’s big cities. In 1950 it took forty-five hours per month. A generation later it had edged up to fifty-six hours. Today it takes 101 hours.

The gap between the pay of the average chief executive and their employees has risen tenfold since the late 1970s to around four hundred.

America, in particular, which had traditionally shown the highest class mobility of any Western country, now has the lowest.

To a large extent, your life chances have been set by the time you are five. ‘[If] you want to be smart and highly energetic, the most important single step you could take is to choose the right parents,’ says Robert Frank.

every single one of America’s 493 wealthiest counties, almost all of them urban, voted for Hillary Clinton.43 The remaining 2623 counties, most of them suburban or small-town, went for Donald Trump. The gap between the West’s cities and the rest is perhaps the purest manifestation of the new divisions. Today, Chicago, like London, sucks in the best talent from its interior in the Midwest, where the swing to Trump was strongest.

In the US, formal employment has shrunk by 0.1 per cent a year since the 2008 financial meltdown. All of America’s new jobs have been generated by independent work, which has risen by 7.8 per cent a year.

Almost three-quarters of independent workers in the US report serious difficulties in chasing up what they are owed. Average arrears were $6000 – a large sum for those on the edge.

On a tour of the plant with Walter Reuther, the auto union leader, Ford pointed at the robots and said: ‘How will you get union dues from them?’ Reuther replied: ‘How will you get them to buy your cars?’

Europe and America’s populist right wants to turn the clock back to the days when men were men and the West ruled. It is prepared to sacrifice the gains of globalisation – and risk conflict with China – to protect jobs that have already vanished.

The more we cede power to global bodies, the more virulent the backlash against globalisation.

When I visited Moscow two weeks after Donald Trump’s election in 2016, my hosts were crowing that America had just experienced its own colour revolution. From Georgia’s Rose Revolution in 2003 to Ukraine’s Orange Revolution the following year, and Moldova’s Grape version in 2009, we had cheered the fall of pro-Moscow regimes along Russia’s borders. Trump’s victory revealed that two could play that game.

‘Moscow can feel like an oligarchy in the morning and a democracy in the afternoon, a monarchy for dinner and a totalitarian state by bedtime,’

This gave undemocratic regimes an excuse to logroll domestic opponents onto the international lists, with devastating effects on political rights around the world. In the decade after 9/11, the number of Interpol red notices rose eightfold.

Washington flooded Baghdad with a bunch of twenty-and thirty-something political hacks who were given colonial-type powers to set policy in Iraq’s unformed democracy.

Fascism is based on group rights. Liberal democracy is founded on individual rights.

Ethnic politics is a game of absolutes. In 1992, Bill Clinton won the overwhelming majority of non-college whites. By 2016, most of them had defected. Having branded their defection as racially motivated, liberals are signalling that they do not want them back.

‘The spot-the-difference politicians. Desperate to fight the middle ground, but can’t even find it. Focus groupies. The triangulators. The dog whistlers. The politicians who daren’t say what they really mean.’

As Eribon explains, it is ‘only when you have crossed from one side of the border to the other’ – the line between two radically different worlds – that you realise how little social capital you possess.

‘I am convinced that voting for the National Front must be interpreted, at least in part, as the final recourse of people of the working classes attempting to defend their collective identity, or to defend, in any case, a dignity that was being trampled on – even now by those who had once been their representatives and defenders.’

But I don’t believe all Trump voters are ignorant, or bigoted; most of them are just evil – evil being defined not as anything so glamorous as beheading journalists or gunning down grade schoolers, but simply as not much caring about other people’s suffering.’

The Trump era’s changing vocabulary also includes a word of more recent coinage: oikophobia, literally an aversion to home surroundings. In reality, it means fear of your own people – the opposite of xenophobia.

It took several decades for suffrage to spread to the majority of white males, and only then by accident rather than design. The founders set the threshold at ‘forty shilling freehold’ but forgot to index it to inflation. As property values rose, so the electorate grew.

The similarities to Trump are striking. Apart from the fact Jackson was ‘slightly over six feet tall . . . with a thick thatch of sandy red hair’, he claimed to speak for the ‘farmers, mechanics, and laborers’ against the financial interests of the time.46 Jackson’s sympathy for the mob extended only to white males. He was a slaveholder and a very wealthy man.

Jackson treated any criticisms of his brutal policies as the crocodile tears of a hypocritical elite.

wrote Sean Wilentz, one of Jackson’s biographers.47 Jackson promised to clean ‘the Giant Augean Stable at Washington’ (Trump promises to ‘drain the swamp’).

‘European integration, it needs to be emphasized, was part and parcel of this comprehensive attempt to constrain the popular will,’ says Harvard’s Jan-Werner Müller.49 ‘It added supranational constraints to national ones.’ The system of anonymous committees that set the rules for its member states – from the minutest product regulations to the limits of tax and spending – is virtually impervious to democratic control. They call it comitology.

As Bismarck put it, ‘Laws, like sausages, cease to inspire respect in proportion as we know how they are made.’ I have watched my fair share of sausage-making in the European Commission and on Capitol Hill. It’s enough to put you off eating pork for good. Yet it is the only alternative to rule by dictatorial fiat.

In the words of one Dutch scholar, Western populism is an ‘illiberal democratic response to undemocratic liberalism’.

One in six people of all ages in America and Europe now believe it would be a good or a very good thing for the ‘army to rule’.

In 1995, just 5 per cent of wealthy Americans believed army rule would be a good thing. By 2014 that had more than tripled. An even higher share of upper-income millennials support autocracy.

To put it more bluntly: when inequality is high, the rich fear the mob.

Vince and Linda McMahon, the couple who became very wealthy through WWE, which they launched in 1980, have given $5 million to the Trump Foundation. They also contributed to Trump’s presidential campaign. In January 2017, Trump nominated Linda McMahon as the head of the Small Business Administration. In addition to making her fortune in WWE, McMahon is a strong advocate of education reform. Her assets added to a Trump cabinet with an estimated collective worth of more than $13 billion.

But what if his supporters do not care? What if middle America has become so cynical about the truth that it will take its script from a political version of pro wrestling?

America’s separation of powers, like any constitutional democracy, is upheld by the people who lead it. Top of the pyramid is the president himself. If the president has integrity, most of the rest falls into place. In Trump’s Washington we must look for salvation further down the pecking order. Richard Nixon, who believed whatever the president did was by definition legal, was not felled by an abstract system. When he ordered the Brookings Institution to be burgled, Nixon’s staff did not report him to the police.

In 1972 Walters was handed a list of two hundred of Nixon’s enemies to investigate. He went to George Shultz, then US Treasury Secretary, to ask what to do. Shultz told him to lock the names in a safe. Walters instead handed the list to a staff member in Congress.

Then there is Congress, America’s first branch of government. Given Capitol Hill’s poor record of oversight, it would have to step up its game immeasurably.