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Theme One: The nature, extent and consequences of oligarchic democracy.

This theme encompasses empirical questions concerning the nature and extent of oligarchic democracy and on whether oligarchic democracy contributes to the crisis of democracy or undermines democratic resilience. The first consideration is to explore the reality of oligarchic democracy in what has been described as the ‘New Gilded Age’, discussing the relationship between the rise of oligarchy and the dominance of neo-liberalism.

Neo-liberalism has been the dominant mode of thinking about issues of political economy since the 1970s. Backed by the ‘Washington Consensus’ of the IMF and World Bank, neo-liberalism advocated so-called ‘structural reform’ policies (privatization, cutting income and corporation taxes, deregulation of  markets, weakening of trade unions, the liberalization of trade, and the reduction in welfare expenditures, coupled with strict monetary policy designed to keep inflation low). This programme, which has been consistently and aggressively applied in many countries, amounted to the rolling-back of the mid-twentieth century gains of ‘New Dealism’ and social democracy, and the erosion of social and economic droits acquis. This has had predictable effects on poverty and economic inequality. Inequality increased in many parts of the world, with more than 80 percent of the world’s population living in countries with widening income differentials by 2007 (United Nations, 2007: 25).

The financial crisis of 2008 exacerbated these trends. Governments stepped in to bail out the losses of private banks, turning private loss into public debt. This sent debt-to-GDP up ratios to unacceptable levels, increasing the cost of public borrowing in many European countries. The severity of the debt crisis, and the depth of the recession, varied from country to country, but in almost all cases the same unpopular remedies, as prescribed by hegemonic neo-liberal economics, were rigorously applied: austerity to bring debt and borrowing under control, financed mostly by cuts to public services, a reduction in transfer payments to the poor, and privatisation of public assets. In some cases, these measures were taken at the initiative of national governments. Elsewhere, they were effectively imposed by the European Union, European Central Bank and the International Monetary Fund. Now, even relatively rich developed countries such as the UK have seen the return of absolute poverty (Sentamu, 2015). Those who are not actually ‘poor’ may experience economic insecurity, worsening working conditions, longer hours, or reduced opportunities for self-betterment. Meanwhile, there has been a concentration of wealth in the hands of the few, with the rise of a super-rich class who have acquired an unprecedented control of the economy (Hacker & Pierson, 2010).

The financial crisis, and the neo-liberal response to it, coincided with the emergence into academic and public consciousness of a body of research examining the social failures of neo-liberal policies. The rigorous application of neo-liberal policies has resulted in ‘increasing domestic unemployment, falling living standards, and profound social and economic inequality’ (Church of Scotland, 2012). Neo-liberalism led to increased economic inequality (Atkinson, 2015), having predictably catastrophic consequences not only for the poorest in society (Frank, 2004), but also for society as a whole (Wilkinson & Pickett, 2009). Moreover, it is increasingly recognized that inequality is in itself damaging – the experience not only of absolute, but also relative poverty, can stunt one’s life chances and diminish human flourishing, as well as increasing tensions in society (Wilkinson & Pickett, 2009).

Since 2008, many countries have seen the rise of a new populism of the left, which seeks to challenge neo-liberalism with a reenergised (if still inchoate in policy terms) social democracy. This is exemplified by Labour leader Jeremy Corbyn in the UK, Bernie Sanders’ presidential bid in the US, and by the rise of new parties of the left such as Syriza in Greece and Podemos in Spain.  Although the electoral success of such left-populist movements has so far been limited, and has arguably been overshadowed by the electoral success of right-populists, the left has had somee success in changing the lexicon of politics and broadening the possible boundaries of political ideology. Words that had almost disappeared from political discourse during the three decades of neo-liberal hegemony – class, wages, inequality, solidarity, poverty, oligarchy, workers’ rights – have now returned with new vigour. The political agenda has shifted, at least a little. The liberalism of the last few decades, which has broadly accepted the primacy of market economics and focused on post-material social and lifestyle issues, now has to compete with the return of ‘bread and butter’ issues. The issues that were central to Sanders’ campaign, for example, while novel and radical in our present generation, would have been very familiar to the politicians of a century or more ago:

 

‘Today, as class inequalities have returned to Gilded Age levels, our political system is beginning to refight a striking number of the great political-economic battles of the late nineteenth and early twentieth centuries – over the over the regulation of banking and credit; the political power of corporations; and more generally, policy responses to heightened economic inequality, both in terms of mouthing poverty and economic insecurity and in terms of concentrations of wealth and power at the top.’ (Fishkin and Fortbath, 2014)

 

One question to be addressed, then, is why, if democracy is supposed to promote the interests of the general public, have democratic states embraced an economic model that seems to reliably to favour the rich, squeeze the middle, and penalize the poor? What accounts for the dominance of neo-liberalism, now that the failure of neo-liberalism to deliver in accordance with its promises has become apparent? In posing this question, we are not raising an ideological objection to neo-liberalism as such, but are suggesting that the continued influence of neo-liberalism, despite its costs and consequences to the non-rich majority, might have something to do with the over-representation of a rich minority, who do disproportionately gain from neo-liberal policies, in decision-making, and that if so this connection is worth investigating. It appears that an oligarchic form of democracy, that is highly responsive to the preferences of rich, and less responsive to those of the non-rich, is at the root of the crisis of representation. As the US philosopher Michael Sandel put it:

 

‘There is a widespread frustration with politics, with politicians and with established political parties. This is for a couple of reasons; one of them is that citizens are rightly frustrated with the empty terms of public discourse in most democracies. Politics for the most part fails to address the big questions that matter most and that citizens care about: what makes for a just society, questions about the common good, questions about the role of markets, and about what it means to be a citizen. A second source of the frustration is the sense that people feel less and less in control of the forces that govern their lives. And the project of democratic self-government seems to be slipping from our grasp. This accounts for the rise of anti-establishment political movements and parties throughout Europe and in the US.’ (Sandel, 2016).

 

At the heart of this is a growing (or perhaps it would be more accurate to say ‘re-emerging’) tension between neo-liberal capitalism and liberal-democracy. The modern liberal-democratic state was born from a fusion of democratic and liberal ideas (Bobbio, 2006; Dahl, 2003). During the honeymoon period of the 1990s, when democratic resurgence coincided with transitions to market economies, these ideas were conflated. ‘Democracy and free markets’ were referred to in the same breath, without noticing that they are not necessarily always happy bedfellows. Former theorists had taken a less sanguine and more critical view of the relationship between liberal-democracy and capitalism. Writing in the aftermath of the 1930s Great Depression, the socialist author Harold Laski noted the tension between liberal capitalism, based upon the unequal concentration of private economic power, and liberal-democracy, based in principle on the equal distribution of public political power. This tension, as he saw it, must produce a winner: either a renewed, empowered democracy must constrain the excessive influence of wealth, or the new oligarchy of wealth would undermine democracy (Laski, 1937: 20-47).

The latent tension between liberal-capitalism and liberal-democracy has now become more acute and increasingly obvious. We see, on the one hand, the imposition of a certain type of economic liberalism that, in favouring oligarchy, is anti-democratic in its instincts and effects – for example through corporate-backed trade treaties that appear threaten to limit the ability of the democratic state to regulate markets in the interests of workers, consumers, the environment, and wider social goods. Russian, Chinese and Singaporean models have been presented as attractive alternatives to liberal-democracy for some economic elites, who can enjoy a stable market economy which allows for economic liberalism while using the power of an economically captive authoritarian state to repress social demands and labour rights. We also see, on the other hand, the rise of an illiberal form of democracy that asserts majoritarian populism above civil liberties, human rights and social pluralism (Zakaria, 1997).

The relationship between wealth and power is a close but complex one. At the lower end of the socio-economic pile, it is clear that the lack of sufficient income is an imposing barrier to effective political participation. Poverty is exhausting, demoralizing, boring, frightening and disempowering. Those who are worried about where their next meal or next month’s rent is coming from are hardly in a position to become informed, active voters. It is easier for a relatively prosperous middle class citizen to pay a babysitter, jump in the car, and go to a local planning meeting, for example, than it is for a poor citizen who has to juggle two jobs, rely on family for child care, and take public transport. Indeed, we find that the poorest citizens are less likely to vote than their richer fellow-citizens (in many cases they are also less likely to be registered to vote, which may be a product of a precarious housing situation).

These barriers to participation are particularly noticeable in the composition of elected assemblies. During the first half of the nineteenth century, the rise of the mass-membership party and the sponsorship of candidates by trade unions and co-operative societies, created a slightly more level playing field for working class candidates. In the UK, for example, the Labour Party was founded expressly to give representation to the working class, who, although recently enfranchised, had until that point only been able to choose between candidates representing the liberal and conservative wings of the ruling class. Much of this social structure which once supported the representation of the working class has now disappeared (Manin, 1997). Social democratic and Labour parties across democractic states have increasingly come to represent the old liberal parties of the nineteenth century – centrist in outlook and middle class or above in their sociological composition. In the words of sociologist and anti-poverty activist Bob Holman (2016):

 

‘Labour is now controlled by very similar people to those in coalition, people from Oxbridge and public schools. These people are drawn from this tiny fraction of this country. They don’t understand, have experience of, or live among the poorest, so there’s so little chance of change. The number of working class MPs in parliament as a whole has declined dramatically. Can you name an MP who lives in a deprived area?’

 

However, threats to democracy come not only from poverty, but also from excessive concentrations of wealth. Writing in 1653, James Harrington identified the connection between power arising from private wealth (dominium) and power arising from public office (imperium). Maintaining a republican polity, in which imperium is widely distributed, would require restraints on the excess of wealth, chiefly through an Agrarian Law that would limit the inheritance of land, in order to ensure a correspondingly wide distribution of dominion (Harrington, 1997). Machiavelli likewise identified the ‘gentlemen’ as a threat to republican liberty (Machiavelli, 1983) and indeed witnessed the destruction of republics at the hands of rich signori who used their private wealth to buy access to public power, and then used public wealth as a form of self-enrichment, until they had established monocratic regimes (Waley, 1988). The exclusion, marginalisation and under-representation of the very poor, and of the working class in general, is therefore one aspect of oligarchic democracy that this project seeks to explore.

On the other hand, there is also a risk posed to liberal-democracy by the very rich, who may be able to use their wealth to dominate of political life. Sometimes, they do this directly, using their money to run for office. Their access to vast resources gives them advantages over those who must devote more of their energies to fund-raising. Since they are not under obligation to donors, they can change policy positions more easily and can even pose as ‘outsiders’ or populists challenging a tainted political system. The very rich may also have their own networks of patronage, outside of party or state structures, that enable them to cultivate a following.

More often, the rich may have an indirect influence through political donations and lobbying, which enable them to install leaders who are responsive to their demands and to influence the policy agenda in accordance with their own interests. Money plays an important role in electoral politics. In the United States, in particular, political action committees contribute vast sums of money to political candidates to get them elected into office. According to the campaigning group ‘Let’s Free Congress’, which seeks to free politics from the influence of big money, less than 1% of Americans contribute to 68% of all election funding (Let’s Free Congress, 2016). These figures suggest that economic elites control political candidates through their large campaign contributions and therefore have a disproportionate influence over politics. In addition, the rich may disproportionately influence politics and public debate through ownership of, or access to, the media, and through privately funded think tanks that support policy options favourable to the rich.

The newer and perhaps more fragile liberal-democracies are also affected. Many Eastern European states have reached a point of democratisation where competitive elections are held and basic rights are for the most part protected, but where there is still a prevailing sense that politics is corrupt and oligarchic in practice. For example, while the proximate cause of the Ukraine crisis was a foreign policy issue, this built on an underlying satisfaction with a political system that, despite twenty years of competitive elections, was seen as favouring the few and not the many. In Latin America, frustration with the ability of traditional democracy to ‘deliver the goods’, in terms of economic and social well-being, has led to the rise of neo-populist variants of democracy in such countries as Venezuela, Bolivia and Ecuador (Wolff, 2012).

Finally, the dominance of economic elites is not confined to domestic borders. In the globalized era, technology and the dissolution of borders have allowed global economic elites to influence policy even at the transnational level. International trade agreements, and international organisations – including WTO, NAFTA, IMF and the World Bank – have assumed political functions in regulating various aspects of global trade and in setting external limits on the ability of elected governments to regulate economies in the national interest. The negotiation of these trade instruments and international agreements, and the bodies set up to administer them, provide opportunities for international financial and corporate interests to shape policies that have impact at the domestic level, but in forums that are often immune from public scrutiny.

 

Possible Questions to Consider:

 

  • How deep and how prevalent is the political inequality between the rich and the non-rich?
  • How does it relate to other inequalities of political power in society such as those arising from ethnicity, education and gender? In particular, how well do measures taken to reduce gender inequality in representation and participation reach women of lower socio-economic status?
  • What is the relationship between the under-representation and marginalisation of the very poor, and the over-representation and marginalisation of the very rich? How connected are these two phenomena?
  • What socio-historical or geographical patterns might account for incidences of oligarchic democracy?
  • How does oligarchic democracy differ, sociologically, between developing, middle-income and high-income countries?
  • Is oligarchic democracy getting worse, or are we just more aware of it?
  • How does oligarchic democracy actually operate – what are the forces and mechanisms by which the rich dominate?
  • If the rich have a disproportionately large, and the non-rich a disproportionately small, influence over public decision making, does this actually matter, in terms of making a difference to policy?
  • How firm is the connection outlined between oligarchic democracy and neo-liberalism?
  • If the non-rich tend to vote against their own economic interests, is the adoption of policies that economically harm the non-rich really a consequence of democracy in action, not of oligarchy?
  • What is the connection between oligarchic democracy and the notion that representative democracy is in crisis, or lacks resilience?
  • How does criticism of oligarchic democracy relate to other forms of anti-elitism (e.g. opposition to experts) and to the loss of trust and deference in society?
  • Does oligarchy pose an existential threat to liberal-democracy itself?

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