Democracy is still the best option

For all its faults, representative democracy is still the best option for personal freedoms, human rights, and thriving economies.

The re-election of Emanual Macron to the French Presidency signals, amongst other things, a real sense of relief. For many of the French it reflects a deep suspicion for the beguiling simplicities of populism. The promises made by the (only just) unsuccessful candidate, Marine Le Pen, and other politicians of her ilk, have sounded warning bells across Europe. 

One only has to look a little further afield, to countries like Hungary, Poland and Turkey to see what happens. Successful populist leaders can leverage democratic processes to gradually squeeze out the rights of minorities and suppress opposition.

Over time, the rights of individuals to express their opinions becomes subservient to the will of the people as a whole; a will interpreted by a small but all-powerful political clique. Self-censorship increases. Political and economic freedoms are diluted. Spontaneity and risk taking – vital ingredients in businesses as well as politics – dwindle and die.

With a brutal war raging in Ukraine, the balance of power between democratic and non-democratic states hasn’t been as crucial since the end of the cold war.

Where do we live? What about our friends?
Most people live in undemocratic states

According to The Economist Intelligence Unit (EIU), in 2021, 54.3% of the world’s population lived in countries which are fundamentally undemocratic.  This covers both totalitarian states and those where electoral and justice systems are so degraded as to remove any real semblance of genuine representation.

The remaining 45.7% the EIU describes as either full or flawed democracies. Flawed includes the fact that elections and basic civil liberties are broadly protected but political life has other ailments: restrictions on press freedom, limited opposition access to TV air-time, poor governance and a decline in political participation, for instance. The recent re-election of Viktor Orbán as Prime Minister of Hungary is probably a good example.

Genuine democracies form an alarmingly small club

The EIU records flawed democracies as being home to 39.3% of the world’s population. This leaves a depressingly small 6.4% living in full democracies. Worryingly, the equivalent figure in 2015 was 8.9%.
Looked at another way, the countries of the G7, plus Australia, India and South Korea, account for about 85% of the people living in fully democratic countries.

Democracy is not perfect, so what about the alternatives?
Shades of authoritarianism disguise the reality of oppression

We are familiar with democracy’s failings: elections and referenda influenced by lies and half-truths, the failure of small parties to be heard at all, and opportunities lost because of the short-termism favoured by governments with their eyes on the next election.

However, even from an imperfect democracy, the alternatives do not look good. The worst excesses of authoritarian rule are being played out in central Europe for all to see, as Russia demolishes lives, towns and cities in the Ukraine. Vladimir Putin’s promised ‘liberation’ is a perverse and hideous thing, a ghastly concoction of paranoia-fuelled destruction.

Elsewhere, lack of democracy is signalled by harsh penalties for criticising the government, severe restrictions on the press and freedom of speech, persecution of minorities including LGBT+, the trampling of women’s rights and many other human rights abuses.

Even China recognises that the ‘command economy’ is out of date

In a dictatorial economy these curbs on individual freedoms come with the hobbling of economic growth. Anyone who went east of the Iron Curtain before 1989 will remember that the best fruit and vegetables always came for the small informal markets. These were run by individuals selling their own produce – giving the lie to the far larger state-run enterprises which functioned mainly because they were told to.

The great populist claim of a single strong man to solve all problems is a simple untruth, based on the narrow interpretation of carefully selected ‘facts’. Strong man solutions are a myth. Economies embrace populism and authoritarianism at their peril.

And the largest communist state still functioning – China – has generated huge wealth only by allowing in a capitalist model of entrepreneurship.

Democracy is good for business
Accountability works

The ability of a country’s population to elect and dismiss its leaders works at several levels. First, and especially when there is widespread participation, most people feel they have a voice in their future, even if in fairly general terms. Second, the people’s ability to de-select a failing government is very effective way of ensuring that governments do most of what they promise.

Third, democratically elected governments are usually better at protecting human rights than non-democratic ones. In this there are varying shades of grey, of course, but the basic idea that individual liberty matters is a foundation stone for stable social, political and commercial life.

Commercial freedoms rely on political give and take

It’s also key for long term economic success. In terms of pure economics, the most capitalist of countries generate high levels of wealth for a few corporations and some individuals. But this is often at the cost of poor working conditions and other forms of exploitation.  In democratic countries the worst excesses of capitalism have been tamed, although this is often a continuing process. The balance supports a healthier business environment where, for the most part, wages are fair and the opportunity to do as one wishes is protected.

Without the freedoms inherent in democracy – freedom of speech, freedom to invest as you choose, freedom to argue with the government – the life of an entrepreneur becomes increasingly difficult. Independent businesses in China, for example, will struggle if they do not tow the party line.  

We can see, too, how fragile relationships will falter when authoritarian regimes go too far: witness the many businesses pulling out of Russia in the wake of Putin’s invasion of Ukraine. Some commercial gains are just never worth the human cost.

Details matter
Always seeking a balance

Western democracies share the belief that the state can’t and shouldn’t do everything. The degree of state intervention varies from country to country, but the basic model of a limited state sector (e.g. health & social services, an independent legal system, local services, elements of transport and infrastructure) holds true for most.

This means that the lion’s share of economic activity remains with the private sector. And with broad basic protection for freedom of expression, this means that businesses will sink or swim on their merits. (Large banks may be an exception, but the idea holds true.)

Freedom of expression is more than sounding off in the pub (although that’s important too)

Freedom of expression means not having to look over your shoulder. Within very broad limits, we are free to say what we will; we’re free to make and sell whatever we think worthwhile. Our brand names are governed by laws around intellectual property, not random government diktat. The products and services we sell are determined by what people will buy.

Artists, designers, manufacturers and software developers – not to mention digital marketing and video animation specialists - are free to make and support whatever will sell. Sophisticated services, virtual as well as real, grease the wheels of commerce. Freedom of speech means we can experiment with branding and sales messages without worrying that ‘big brother’ is watching.

Above all the energy and dynamism that comes with creativity is given free reign. Authoritarian rulers are notoriously sensitive to anything which might damage their brand, even accidentally. So perhaps it is these freedoms – to experiment, to fail, to succeed, with good evidence to persuade people that our brand is best – that are amongst the ones we should value most.

Let’s celebrate our democracy and look after it. The alternative sits not far away, looking down the barrel of a gun.

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