Rethinking liberal democracy for changing times

In 1992, renowned political scientist and scholar Francis Fukuyama published his magnum opus, The End of History and the Last Man to great fanfare.

The Berlin Wall had fallen only three years prior, and the mighty Soviet Union met its demise the previous year. Fukuyama’s book became well-known for positing that the end of the Cold War and the fall of the Iron Curtain signalled the “end of history”, where Western liberal democracy has triumphed as the “final form of human government.”

Exactly 30 years after Fukuyama’s groundbreaking thesis, humanity is facing a crisis on multiple fronts.

The rapid economic growth in the nineties, fuelled by globalisation and increasing demand from India and China lifted millions out of poverty, but at the same time resulted in groups of people across many countries feeling alienated and left behind.

Mankind’s pursuit of economic prosperity has come at the expense of planetary health, and a rapidly warming Earth has become the current generation's most urgent cause.

Equally worrying is the fact that, despite Fukuyama’s optimism regarding the triumph of liberal democracy, three decades later, we have seen how democracies remain vulnerable to autocrats, populists, and nationalistic leaders.

Democracy is further threatened by our reliance on the Internet as a medium of communication and consumption, which comes at the price of our privacy, mental health and in some cases, lives.

Of course, Covid-19 has only exposed and exacerbated all the critical issues of our time - inequality, institutional decay, the power of big tech and the threat of climate change.

Navigating these complex and interrelated problems requires both upholding the ideals of liberal democracy, free markets and open societies as well as the need to rethink our economic indicators, governance systems and the how we protect our borders.

This rethinking process must first acknowledge that the opportunities provided by liberal, open societies coupled with a free market economy were always heralded to be positive - social mobility, increasing wealth, consumer choice, civil liberties and free and fair elections.

This is in contrast to autocratic governments that restricted speech, curtailed the press, undermined elections and centrally planned the economy - all of which has contributed to the diminishing of human autonomy and dignity.

Individual liberty, which lies at the heart of liberal democracies around the world, values the right of the individual to make choices for themselves, as opposed to the need to consider the wants and needs of collective society.

The centrality of the individual over the collective is a debate that has raged on since mankind existed and is the driving force behind many political movements around the globe.

However, one must not fall into the trap of viewing liberal democracy with rose-tinted lenses just because it “triumphed” over other systems.

Like any other system in the world, flaws exist alongside merits, and events that happen over time means that some previously held assumptions need to be re-examined. The 2008 global financial crisis was such an event, and a more recent example is of course the Covid-19 pandemic.

The 2008 GFC brought to light several fundamental questions, such as how much should the government regulate the economy? Why are some companies too big to fail? What are the consequences of an obsession over home ownership? How governments responded to the GFC was just as telling.

In America, the government spent 700 billion dollars bailing out banks that were part of the problem to begin with, in the name of rescuing the financial system from imploding and to stabilise the economy.

Even worse was how millions of Americans lost their homes and jobs while not a single CEO in Wall Street was brought to justice for the damage they caused.

Discontent against the “liberal elite” who control these financial institutions and the politicians who enable them gave rise to populism and the search for the “outsider” saviour who promises to dismantle the system and give voice to the marginalised, the so-called silent majority.

In Europe, punishing austerity measures were imposed, reducing funding for policing, housing, welfare and local governments, further entrenching poverty and exacerbating inequality.

It is not surprising that a similar trend of populist politics has also swept upon many countries in Europe, notably Hungary, Austria, France and the United Kingdom. What do these problems reveal?

Firstly, liberals around the world need to come to terms with the reality that with every step taken to establish open societies, decentralise the economy and embrace diversity will invite backlash from those who do not believe in those ideals.

The way identity now dominates political discourse on both the left and right needs to be seen as a reactionary measure rather than simply racism or political correctness.

The question we need to be asking is - what do the identity politics of today tell us about the broader socio-economic problems we face as a society?

When we think about liberal democracy being eroded, it is useful to do so with the realisation that it was never the default state that humanity lived under, and it certainly was never the best, but in the words of Churchill, the least worst.

Secondly, there needs to be a serious rethinking about which country holds the so-called “moral compass” of liberal democratic values, or is there such a thing at all these days?

Since the end of the Second World War, the United States prided itself as the bastion of liberal democratic values, the rule of law, open borders, social mobility and free markets.

Unfortunately, America has lost the credibility to do so with the election of Donald Trump in 2016, his attempt to overthrow the legitimate electoral victory of Joe Biden and the grip he still holds on the Republican Party today.

The exit of the United Kingdom from the European Union due partly to anti-immigrant, xenophobic rhetoric signals challenging times for the EU as well, coupled with worsening rightwing populism in member states such as Hungary and Austria.

India, the world’s largest democracy under the leadership of Narendra Modi, has enabled hatred towards minorities, particularly the country’s 200 million Muslims. Lastly, China’s place amidst all this must not be taken for granted.

The Chinese Communist Party’s one-party rule, dismal human rights record and suppression of dissent is real and deserves condemnation.

At the same time, it is also important to recognise that China’s influence in the world means that it would be foolish to ignore the way the CCP runs their show.

Venture capitalist Eric Li, writing for The Economist, argued that we should start measuring democracy not by procedures but by outcomes.

More interestingly, he also suggested that liberalism should be decoupled with democracy, as liberal governments around the world have failed to deliver democratic outcomes for their people – as exhibited by worsening inequality, social divisions, corruption, and poor governance.

It is futile to suggest that the “China way” replace the current way that liberal democracy is being practised.

The world is not so black and white.

But it is also foolish to deny that liberal democracy is facing serious challenges which need to be confronted head-on, not by making ourselves feel good by drawing comparisons with the lowest common denominator such as North Korea, but with liberal democracies that have proven to deliver real positive outcomes for their people.

Perhaps the Nordic model can lead the way.

Aira Azhari is Senior Manager of the Democracy and Governance Unit at the Institute for Democracy and Economic Affairs (IDEAS), a think tank based in Kuala Lumpur, Malaysia.