A World of Insecurity: Democratic Disenchantment in Rich and Poor Countries
Author: Pranab Bardhan
Publisher: Harvard University Press
Price: Rs 499
An abiding belief in the economic and cultural salience of the democratic principles of liberty, equality, and fraternity characterizes Pranab Bardhan’s work. Originally a native of India — an “unlikely democracy”— he has been resident in liberal, democratic, California since 1977. Not surprisingly, India looms large in his thoughts, though the book is about the political economy of growing global insecurity and its link to democratic despondency. Over the past decade the number of liberal democracies has reduced from 41 to 32, accounting now for just 14 per cent of the global population.
Some of the despondency springs from the strict manner in which liberal democracy is defined. India, for instance, is now an “electoral autocracy”, a retreat from its liberal democratic constitutional construct. To be fair, India has been there before, briefly in the mid-1970s during the Emergency, before self-correcting within two years, to over four decades of uninterrupted “electoral democracy” with increasing benefits for all, albeit unequally shared.
Democracy itself is no longer a single template. Real life examples range from tiny, community-sensitive social democracies in rich Scandinavia to electoral democracy in continent-sized, culturally heterogeneous, lower-middle income India and authoritarian democracy in economically buoyant, near homogeneous, near-rich China.
Dr Bardhan contests the label “democratic” being affixed to China despite its decentralized, meritocratic selection of party and government officials till at least the provincial level, acknowledged success in vastly reducing poverty, enhancing public services, and most recently enhancing publicly funded R&D in advanced technology. He prefers the term “authoritarian capitalism” to capture China’s efficiency enhancing achievements via close collaboration with the private sector, accompanied, sadly, by trade-offs in diminution of human rights and growing state power.
This book caters to the “pick and choose”, time-constrained reader. Each of the meaningfully subtitled nine chapters, comprehensively address a standalone theme, painstakingly restating relevant comments and arguments from other chapters. This could, however, irk more traditional readers expecting a patient read through to progressively reveal the plot, leading to a grand finale. Godot never arrives, and readers must use their own devices to identify the many takeaways.
The dominant concern relates to the origin and patterns of growing economic and cultural insecurity, which the author believes is the root cause of disenchantment with liberal democracy, more so than growing inequality. Insecurity manifests itself personally and very quickly through loss of employment, untimely loss of life (as during the Covid-19 pandemic) or even loss of identity (via immigration or economic marginalization). In contrast, inequality concerns are abstract and not as keenly felt if those at the bottom are doing better than earlier, as in China or India, even though the very rich are doing phenomenally better.
Economic insecurity manifests as relative joblessness amongst less educated, blue-collar workers competing now with automation and product and service imports in the developed world. It is matched by slower than needed job creation in the formal economy in developing countries and the pervasiveness of informal, non-contractual work. Add to this the fickleness of footloose financial capital in choosing winners and thereby creating losers and one begins to understand the growing apprehension about the power of global trade and capital flows to impact ordinary lives negatively.
Immigration evokes similar feelings of distrust and cultural anxiety in the slipping away of a settled life. Nor can pulling up the drawbridge help. Doing so preserves fraternity but curtails liberty and could worsen inequality if domestic tyranny replaces foreign tyranny.
Bardhan advocates expanded application of the social democracy principle of accountability of the state to citizens. Authoritarian states typically do the reverse, making citizens accountable to the state, usurping the source from which sovereignty flows, with citizens reduced to grateful supplicants of state largesse. Enhanced decentralization is a safeguard mechanism for “taking back control”, if adequate fiscal and administrative power is transferred to local jurisdictions, comprising well-knit homogeneous communities with high levels of trust.
More controversially, Bardhan proposes reactivation of moribund trade unions to safeguard worker wages, which have lagged company profits, and extension of their reach as co-operative hubs for providing social protection and cultural rejuvenation, including in collaboration with religious organizations. Substantive representation of workers on corporate boards could ensure active worker participation in decisions concerning technological changes affecting jobs or excessive managerial compensation. Similar high-level representation in international trade agreements could nuance “import or make” decisions.
Decentralizing power in corporate boards is not trivial. It clearly does not appeal to Elon Musk. The jury is out on whether such enhancements in worker power, including to representation in international negotiations, would render the process of economic reform even more difficult or serve to regulate the excesses of capitalism. Similarly, even if selective justification for state activism in the economy exists, doubts persist about the fiscal viability of “big government” options for environmental transition, social protection, worker, and community welfare. Consider the possible negative impact on macroeconomic stability if capacity- constrained developing country governments overreach.
A section narrates ongoing efforts towards better international cooperation but reforming the frozen-in-time governance system of the moribund United Nations, which perpetuates and legitimizes disconnects between values and practice, remains unattended. Nevertheless, Bardhan lives up to his reputation of generating a bundle of plausible ideas for citizens and governments to explore while managing uncertainty and insecurity — the caveat being a contextual good fit is everything.
This Book Review originally first appeared in the Business Standard December 14, 2022 https://www.business-standard.com/article/beyond-business/reinventing-social-democracy-122121401354_1.html