Wednesday, December 21, 2011

Can Liberal Democracy Survive The Decline of The Middle Class?

This is long article that should be required reading for everyone. It begins with an overview of history and ideologies. It accurately describes the factors that are leading to declining incomes in the middle class and argues that liberal democracies are dependent upon a middle class. There are reasons to believe that decline of the middle class will continue, along with support for liberal democracies, unless the left can present an ideology that can attract the middle class. The prevailing political and economic narrative is conservative and it has done a better job of presenting a coherent ideology to the bulk of the middle class. This has been true in Europe as well as in America.

My focus in this overview of the article, is to review the essential elements of liberal democracy that will engage the middle class in making the changes necessary to preserve liberal democracy. It consists of political and economic elements that need to be presented as a coherent package.

The existing conservative narrative places the market above democracy. The new narrative must reverse this narrative. The economic narrative must be subordinated to the restoration of a well functioning democracy. Government must be legitimated as an expression of the public interest. This will require a redesign of the public sector and the use of technology to efficiently deliver public services. It will also require the presentation of a realistic route to ending interest group domination of politics.

A new vision of capitalism must be presented that is valued in terms of its benefits to the middle class. The market is not an end in itself. The conservative narrative rests on the vision that markets, left to their own devices, can better serve the public interest. The case must be made for a workable partnership with government. Globalization provides benefits but it has also led to developments that threaten the middle class. The public must understand that globalization with social controls is superior to globalization shaped primarily by corporate interests, and corporate direction, justified by the ideology of free trade.

The current narrative rests on an edifice of neo-liberal ideology. That ideology must be attacked thoroughly and with continuity. It won't be unseated overnight, but it can be replaced by a coherent new paradigm. That paradigm needs to be developed. It cannot rest upon the restoration of old paradigms that no longer appeal to the middle class.

The current narrative holds that incomes represent contributions to society, and it holds that individual preferences are sovereign. A new liberal narrative must replace this 200 year old narrative that does not represent current reality. It should acknowledge that even if markets were efficient in rewarding socially useful talents, the distribution of talent as well as access to education is unevenly distributed. Individuals are shaped by the surrounding society which can be made much fairer as well.
The populist ideology which has motivated the far right must be reshaped as a critique of elites who place their interest above the public interest. It must also be coupled with a route to a political system that is not dominated by monied interests.

We should expect that income inequality will continue to grow since present trends are self reinforcing. The question is whether the left can recognize why its narrative has not been effective, and whether it can provide a better narrative than the prevailing ideology of free markets and a smaller state.

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