Friday, July 5, 2013

Colin Crouch's Post-Democracy and the Fate of Egalitarian Politics

A few months ago, while reading an article in Aeon Magazine by Henry Farrell, I came across British sociologist Colin Crouch’s concept of post-democracy. I had read one of Crouch’s works before, The Strange Non-Death of Neoliberalism (2011), and his concept of post-democracy piqued my interest.  Intrigued, I decided to read the full book.  Crouch penned Post-democracy in 2004; the social democratic discontent with Tony Blair’s New Labour is palpable, but the book has grown even more relevant with time. In this diary, I want to present and analyze his central argument, ask some questions about what might be missing, and address the solutions he proposes.

First, we have to understand what Crouch means by the titular term “post-democracy” and how it differs from democracy itself. In “post-democracy,” a pole toward which Crouch argues Western democracies have been moving for the past several decades, elections are held and governments change, and all of the formal trappings of democracy are in place. However, the form is belied by the substance.  Rather than celebrating participatory governance and inclusive deliberation, politics degrades into a “tightly controlled spectacle” designed by media experts in which debate is confined to a narrow range of self-selected issues (p.4). As in theater, the democratic public becomes a passive audience watching a production designed for their consumption and whose details are determined through behind-the-scenes interaction, here between elected officials, elites, and business interests. New elections may come, and the voters may, in discontent, throw out the old and vote in the new; however, the policy differences between the new and old coalitions will be slight. The deference toward corporate interests will remain, and little effort will be expended in challenging the status quo and the existing structures of power that govern society. In the mind of the politician, the elections affirm the current status quo and provide a mandate for their platform—a tragic irony when all major party platforms converge on certain positions that the public opposes (e.g. lowering the corporate income tax, reducing Social Security benefits).

The contrast between the democratic ideal (or “peak democracy”) and post-democracy reflects an inherent/underlying tension between egalitarian democracy and liberal democracy. During the Cold War, the United States actively sought to equate democracy with its own form of liberal democracy. Egalitarian democracy is that of maximalist participation, “when there are major opportunities for the mass of ordinary people to participate through discussion and autonomous organizations, in shaping the agenda of public life, and when they are actively using these opportunities” (p. 2).  In an egalitarian democracy, the informed and engaged public comes together through means of deliberation to identify new problems or discover new identities and organizes around them to effect change through legislative means. Liberal democracy, on the other hand, de-emphasizes this spirit of democracy and emphasizes electoral participation as the main type of mass participation, wide freedom for lobbying activities (which always means business interests), and limited intervention in a capitalist economy. The distinction also parallels that of positive and negative citizenship and positive and negative rights. Positive citizenship—that of organizing, deliberating, and making demands—emphasizes positive rights such as the right to vote, the right to form a union, the right to an education, and the right to accurate information. Negative citizenship, that of complaint and allocation of blame, stresses negative rights, e.g. the right to sue and the right to property, instead.

Crouch describes the movement of democratic politics as a parabola, rather than a circle reverting to the Gilded Age. We have, as he sees it, passed the peak of democracy, which he locates in mid-century (the New Deal era for the U.S., the post-war period for the U.K). Democratic politics have lost their vigor even though there have still been concrete advances over time, most notably the increased participation of women (an issue which I will discuss again later). Threatening these advances  are the reappearance of pre-democratic traits like corporate privilege; only now they come dressed in slogans of markets and free competition (p. 51).

The global firm, which increasingly diverges from the abstract firm of the economics textbook, is the key institutional (and institutional model) of the post-democratic world. Crouch traces the history of the modern global firm to the collapse of the Keynesian paradigm in the 1970s, in which rapid technological change, intensifying global competition, and more demanding consumers threatened the previous stability of product markets—leading to higher rates of corporate bankruptcy and unemployment as companies failed to adapt (p. 32). Because of their instability (and their greater mobilization), businesses were able to get the ear of governments more easily than before. The governments simply never stopped listening, and the heightened competition of globalization ensured that the surviving firms were stronger and more assertive against both governments and workers. These new, stronger companies can use their global reach against the host governments by threatening to leave unless the government weakens labor laws, guts the public sector (“structural reform”), or lowers taxes, and politicians are often not willing to call their bluff (pp. 33-34). In order to maximize flexibility even further, such companies increasingly become “phantom firms,” entities characterized by (i) rapid changes in identity through engagement in take-overs, mergers, and frequent re-organizations (or name changes) and (ii) the growing casualization of the workforce. Eventually, Crouch highlights, “having a core business itself becomes a rigidity,” and firms will out-source and sub-contract to maximize flexibility and mobility, leaving the firm in charge of brand management alone (p. 37).  The distance between management and labor grows ever larger.

Despite the firm’s quest for flexibility, two factors remain constant: (a) the existence of a small group of individuals who hold real power (despite nominal changes) and (b) the increased prominence of the concept of the firm in society (despite on-the-ground realities). With the increased prominence of the market ideal in society, governments have difficulty delineating public-private boundaries. Just as the “phantom firm” seeks to sub-contract its main operations, the government seeks to contract out more and more of its own functions, leaving a dearth of expert knowledge that will only offer further justification for outsourcing government functions. Moving away from its past specializations, the state becomes an “institutional idiot” that sees its primary (perhaps even only) role as guaranteeing the freedom of markets (pp. 40-41). Moreover, there exists a clear parallel between the “phantom firm” and the post-democratic political party, which outsources its policies to business lobbies and increasingly focuses its attentions on the more theatrical side of politics. The government, in its embrace of the market ideal and abandonment of the concept of public service, increasingly resolves itself into three parts: (1) activities which it tries to convert into market form, (2) a burden of obligations the private sector will not take off its hands, and (3) the theatrics---which create the public perception of the government as “a mixture of incompetence to provide real services plus parasitic spinning and electioneering” (p. 43). Such perception produces widespread cynicism among the public.

One of the key flaws of the microeconomic concept of the firm is that the firm is not only an organization, but it is also a concentration of power. As governments withdraw from their public spending, nonprofit institutions—those focusing on research, education, culture—increasingly turn to the corporate world for financial sponsorship and, of course, grow less likely or willing to challenge the status quo. Moreover, the interaction between government and business shifts from the relationship with employers’ associations to relationships with individual corporate leaders whom the government celebrates as sources of expert knowledge (pp. 43-46). Remember Obama’s “jobs council,” filled with CEOs of companies that laid off their workers and avoided taxes? Such a belief that the directors of the global firms have some “essential wisdom” is risible because the idea of perfect knowledge—from your standard econ textbook—is a chimera. Since markets are not perfect, we cannot assume that successful firms had the best knowledge, and the rapidly changing nature of the world negates the possibility of perfect knowledge itself. Furthermore, there are some forms of knowledge peculiarly available to central agents, those on which the government had been and should be the expert (p. 98).

In Crouch’s narrative, the rise of the firm has both a correlative and causative relationship with another factor driving the trajectory of post-democracy: the decline of the manual working class. This comes as no surprise as Crouch has written about a “parabola of working-class politics” in the past, and the working-class—especially the trade unions—had traditionally been the constituency and funding source of center-left parties. The ties between trades union and the parties of the center-left were always much stronger in Europe than in the U.S., which has always seen lower rates of unionization and a less social democratic center-left party, but the broad theme holds true.

With the working-class and the unions that marked its traditional form of organizing and articulating demands in decline, there has been as of yet no new discovery of class identity among the disparate groups of the middle-class: “the diverse groups of professionals, administrators, clerical and sales workers, employees of financial institutions, of public bureaucracies and of welfare state organizations” (p. 57). These groups, which often see much lower rates of unionization (with the exception of public sector workers), have historically been reluctant to ally themselves with the interests and organizations of the working-class yet have been supporters of the universal welfare state. Despite such leanings, as a class, they have not articulated clear demands or developed an autonomous political profile (p. 60).  In the early 20th century, lib-lab coalitions grew in popularity among Western democracies. In the U.K., social liberals like J. A. Hobson and L. T. Hobhouse sought to form such coalitions with the organizers of the growing trades union movement to counter reactionary forces. In the U.S., the Progressive Era saw cross-class coalitions of the middle- and upper-middle class reformists and members of the working-class in favor of legislation for workplace protection and food safety and against monopolies and government corruption. In Germany, too, revisionist Social Democrats like Eduard Bernstein sought to forge liberal-socialist progressive coalitions. The “reform” movements of today—Britain’s New Labour, the US’s New Democrats, and the German Neu Mitte—suffer from a lack of constituency. The old funding and electoral base of the center-left has diminished, leaving no natural base, and the strengthened and emboldened corporate interests have jumped—with alacrity—to fill the vacuum (p. 64). The potential for a "radicalized upper middle-class" which Chris Hayes champions in The Twilight of the Elites remains still largely just a potential, as such actors have yet to gain a fully realized political and organizational identity.

Now, if we have a diagnosis of a problem, we need to have a prescription of a solution. In his conclusion, Crouch addresses how the citizen should grapple with both the firm and the political party in the post-democratic age.  In discussing corporate dominion, he notes that prior radicals would have called for the abolition of capitalism, a solution Crouch claims is no longer viable because no one has yet found “a more effective alternative to promote product innovation and customer responsiveness” (p. 106). In lieu of abolition, he calls simply for the regulation and restraint of capitalist behavior as well as the establishment of new rules to prevent, or at least closely regulate, the flow of money and personnel between parties, circles of advisers, and corporate lobbies (p. 109). He likewise recommended re-establishing the concept of public service and conducting research into the effects of the commercialization of public services on their efficiency.

Although I don’t disagree with his recommendations, I find them wanting. Throughout the book, he spoke about how the global firm is able to resist regulations, and to solve this problem, he proposes establishing just the regulations he admitted the global firm would resist. He does not provide the vital step to get from here to there. I would have liked him to spend more time focusing not only on how to regulate the corporation from outside but how to change it from within, through innovating new models of how the corporation could function. For this, one could look to the growing number of cooperatives, community land trusts, employee stock ownership plans (ESOPs), and B Corps. These—and other models—seek to democratize and imbue a social mission into the concept of the corporation itself. Such models make corporate social responsibility more than just window-dressing. The diffusion of such models obviously takes more time than does the implementation of new regulations, but such innovation is necessary if we are to build a more equitable and sustainable economic system.

Moreover, although research into the effects of commercialization on the efficiency of public services would be interesting, it is not likely to change the minds of committed neoliberals. A study from the Project for Government Oversight from two years ago found that private contracting costs the government more money.  POGO surveyed 550 contracts, deemed “fair and reasonable,” for 35 different jobs across government agencies and found that private contractors cost more in 33 out of the 35 jobs. On average, private contractors were paid 83% more. However, as far as I can tell, we have not seen a resultant anti-privatization push in the Beltway or in our “laboratories of democracy” in the states. Those who seek to privatize government services will do so out of a conservative moral vision or an economic self-interest, not because they found evidence by crunching numbers.
Governments can also change the way they implement the corporate income tax (not lower it) in order to curb widespread avoidance.  A month ago, in response to the hearings on Apple's tax avoidance, Dean Baker of the Center for Economic Policy Research offered such an example:
Suppose we give companies the option of giving the government an amount of non-voting stock (I would suggest something like a 30 percent stake) which would be treated exactly like the company's common stock, except without the voting privileges. This means that if the company distributes profits to the shareholders through dividends, then the government's shares get the exact same dividend. If it buys back 10 percent of its shares, then it also buys back 10 percent of the government's shares.

The beauty of this approach is that there is no way to escape the implicit taxation. In addition it has the enormously beneficial effect that there would no longer be any money in playing tax games. Companies could focus on doing business -- making better products or providing better services -- rather than gaming the tax code.

The share option can even be voluntary. If companies want to keep trying to play games with the tax system, they can refuse to go the route of giving shares to the government. Of course everyone will then know what these companies are doing, but that's their call.
E. F. Schumacher discussed just such a model in the chapter "New Patterns of Ownership" of his 1973 work Small is Beautiful: A Study of Economics as if People Mattered, as well. Is there political will behind this idea?  Probably not.  However, one must always keep good ideas alive so that they are in shape when the time is ripe. 
With regard to politics, Crouch argues for the continued relevance of political parties and wants to see a renewal of democratic participation and center-left politics.  He suggests supporting more participatory forms of governance and strengthening decentralization and local activism. The diffusion of participatory budgeting offers a good example of such locally-rooted participatory democracy. Moreover, as unions had traditionally been the force behind center-left parties, he argues that unions will need to take on a more expansive role in representing social concerns and also be willing to take the risk of punishing center-left parties if they take union support for granted (p. 114). However, I have to wonder how effective such threats would be in light of the weakened state of the labor movement.

However, to maintain a vibrancy in center-left politics, Crouch argues for the importance of mobilizing new identities, seeing hope in “this constant scope for new disruptive creativity within the demos” (p. 116). He provides the aforementioned example of the women’s movement and also mentions the ecological (environmental) movement. Although I don’t really categorize the environmental movement as an identity-oriented movement, a lot of new activism does focus on local identities in the context of environmental justice.  Take, for example, the galvanization of diverse local communities behind the anti-fracking movement and the anti-Keystone movement. Both of those issues inspired a number of people who may have had little past experience in political activism to take a stand in protecting the environment, health, and economic stability of their communities because the effects, both actual and potential, became real to them.

Moreover, as for the women’s movement, we’ve seen impressive progressive organizing and messaging around reproductive rights over the past year—against the invasive ultrasound bills and, most recently, against the anti-abortion legislation pushed by Republicans in Texas and other states.  The “people’s filibuster” in the Texas Senate, culminating state senator Wendy Davis’s 10+ hour filibuster, epitomized such a blend of passion, participation, and organization.

Crouch’s concept of “post-democracy” offers a useful framework for interpreting the current state of democratic politics in the advanced industrial nations, particularly in the U.S. and the U.K., where the market ideal has a tighter grip on the political debate and imagination. Crouch’s book is more descriptive than prescriptive overall, and consequently he provides more attention to the diagnosis than the cure.  However, his emphasis on the dynamism within the demos that spurs the discovery of new identities and problems around which to organize offers hope that the power to bend the slope of the parabolic trajectory of democratic politics as of yet remains strong.

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