Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy

In societies where incomes and educational levels are low, it is often far easier to get supporters to the polls based on a promise of an individual benefit rather than a broad programmatic agenda.

National identity is frequently formed in deliberate opposition to other groups and therefore serves to perpetuate conflict.

I argued earlier that clientelism is an early form of democracy: in societies with masses of poor and poorly educated voters, the easiest form of electoral mobilization is often the provision of individual benefits such as public-sector jobs, handouts, or political favors. This suggests that clientelism will start to decline as voters become wealthier. Not only does it cost more for politicians to bribe them, but the voters see their interests tied up with broader public policies rather than individual benefits.

When the middle class constitutes only 20–30 percent of the population, it may side with antidemocratic forces because it fears the intentions of the large mass of poor people below it and the populist policies they may pursue.

The displacement of class politics by identity politics has been very confusing to older Marxists, who for many years clung to the old industrial working class as their preferred category of the underprivileged. They tried to explain this shift in terms of what Ernest Gellner labeled the “Wrong Address Theory”: “Just as extreme Shi’ite Muslims hold that Archangel Gabriel made a mistake, delivering the Message to Mohamed when it was intended for Ali, so Marxists basically like to think that the spirit of history or human consciousness made a terrible boob. The awakening message was intended for classes, but by some terrible postal error was delivered to nations.

Diego Gambetta, however, presents an elegant economic theory of the Mafia’s origins: mafiosi are private entrepreneurs whose function is to provide protection of individual property rights in a society in which the state fails to perform this basic service. That is, if one party to a private transaction is cheated by the other, he would normally take his partner to court in a well-ordered rule-of-law society. But where the state is corrupt, unreliable, or perhaps altogether absent, one must turn instead to a private provider of protection and task him to threaten to break the legs of the other party if he doesn’t pay up. By this account, the Mafia is simply a private organization providing a needed service that is normally performed by the state—that is, use of the threat of violence (and sometimes actual violence) to enforce property rights. Gambetta shows that the Mafia arose precisely in those parts of southern Italy where there was economic conflict over land, mobile wealth and a high volume of transactions, and political discord in connection with the changes taking place in the nature of the Italian state after 1860.

The Chinese Communist Party has seen fit to protect most property rights because it recognizes that it has a self-interest in doing so. But the party faces no legal constraints other than its own internal political controls if it decides to violate property rights. Many peasants find their land coveted by municipal authorities and developers who want to turn it into commercial real estate, high-density housing, shopping centers, and the like, or else into public infrastructure like roads, dams, or government offices. There are large incentives for developers to work together with corrupt local officials to illegally take land away from peasants or urban homeowners, and such takings have been perhaps the largest single source of social discontent in contemporary China.33

When liberal democracies work well, state, law, and accountability all reinforce one another

The courts, instead of being constraints on government, have become alternative instruments for the expansion of government.

The future of democracy in developed countries will depend on their ability to deal with the problem of a disappearing middle class. In the wake of the financial crisis there has been a rise of new populist groups from the Tea Party in the United States to various anti-EU, anti-immigrant parties in Europe. What unites all of them is the belief that elites in their countries have betrayed them. And in many ways they are correct: the elites who set the intellectual and cultural climate in the developed world have been largely buffered from the effects of middle-class decline. There has been a vacuum in new approaches to the problem, approaches that don’t involve simply returning to the welfare state solutions of the past. The proper approach to the problem of middle-class decline is not necessarily the present German system or any other specific set of measures. The only real long-term solution would be an educational system that succeeded in pushing the vast majority of citizens into higher levels of education and skills. The ability to help citizens flexibly adjust to the changing conditions of work requires state and private institutions that are similarly flexible. Yet one of the characteristics of modern developed democracies is that they have accumulated many rigidities over time that make institutional adaptation increasingly difficult. In fact, all political systems—past and present—are liable to decay. The fact that a system once was a successful and stable liberal democracy does not mean that it will

So why did strong, modern states not emerge in Latin America as they did in Europe? If there is a single factor that explains this outcome, it is the relative absence of interstate war in the New World. We have seen how central war and preparation for war were in the creation of modern states in China, Prussia, and France. Even in the United States, state building has been driven by national security concerns throughout the twentieth century. Though Europe has been remarkably peaceful since 1945, the prior centuries were characterized by high and endemic levels of interstate violence. Over the past two centuries, the major political acts that reconfigured the map of Europe—the French Revolution and Napoleonic Wars, and the wars of unification of Italy and Germany—all involved high levels of violence, culminating in the two world wars of the twentieth century. There has been plenty of violence in Latin America, of course: today the region is infested with drug cartels, street gangs, and a few remaining guerrilla groups, all of which inflict enormous sufferings on local populations. But in comparison with Europe, Latin America has been a peaceful place in terms of interstate war. This has been a blessing for the region, but it has also left a problematic institutional legacy.

But the simple availability of information about corruption tends not to produce genuine accountability because the politically active part of the population are members of clientelistic networks.

This new middle-class elite sought reforms against the interests of a political class that had succeeded in mobilizing the vast mass of nonelite voters into the patronage system.

Under these circumstances, revenue from the New World in the form of exports of gold and silver was critical. The Spanish government, however, imposed strict rules limiting economic exchange—a system known as mercantilism—under the mistaken belief that this would maximize its income from the colonies. Exports from the New World could go only to Spain, indeed, to a single port in Spain; they were required to travel in Spanish ships; and the colonies were not permitted to compete with Spanish producers of manufactured goods. Mercantilism, as Adam Smith was to demonstrate in The Wealth of Nations, created huge inefficiencies and was highly detrimental to economic growth. It also had very significant political consequences: access to markets and the right to make productive economic investments were limited to individuals or corporations favored by the state. This meant that the route to personal wealth lay through the state and through gaining political influence. This then led to a rentier rather than an entrepreneurial mentality, in which energy was spent seeking political favor rather than initiating new enterprises that would create wealth. The landowning and merchant classes that emerged under this system grew rich because of the political protection they received from the state.

Interstate wars in Latin America have been so infrequent and politically unimportant that many major surveys of Latin American history barely cover them. Compared to Europe and ancient China, or indeed North America, war had a marginal effect on state building. Charles Tilly’s aphorism “war made the state, and the state made war” remains true, but begs the question of why wars are more prevalent in some regions than in others.

Finally, state capacity is a function of resources. The best-trained and most enthusiastic officials will not remain committed if they are not paid adequately, or if they find themselves lacking the tools for doing their jobs. This is one of the reasons that poor countries have poorly functioning governments. Melissa Thomas notes that while a rich country like the United States spends approximately $17,000 per year per capita on government services of all sorts, the government of Afghanistan spends only $17 when foreign donor contributions are excluded. Much of the money it does collect is wasted through corruption and fraud. It is therefore not surprising that the central Afghan government is barely sovereign throughout much of its own territory.6

The principle of effective government is meritocracy; the principle of democracy is popular participation. These two principles can be made to work together, but there is always an underlying tension between them.

a politically developed liberal democracy includes all three sets of institutions—the state, rule of law, and procedural accountability—

[D]emocracy can be in tension with itself: efforts to increase levels of democratic participation and transparency can actually decrease the democratic representativeness of the system as a whole. The great mass of individuals living in a democracy are not able by background or temperament to make complex public policy decisions, and when they are asked to do so repeatedly the process is often taken over by well-organized interest groups that can manipulate the process to serve their narrow purposes. Excessive transparency can undermine deliberation.

in cold countries they have very little sensibility for pleasure; in temperate countries, they have more; in warm countries, their sensibility is exquisite.

In Europe, demands for expanded popular participation came on the heels of war; the rise of the British Labour Party in the 1920s, for example, was in some ways a consequence of the sufferings of the working class in the trenches of World War I. In Latin America, by contrast, elites usually pulled back from interstate conflicts precisely to avoid having to turn to the masses for help.

The vast majority of workers had no such representation; in countries where benefits like pensions were tied to regular jobs, they entered the informal sector. Such individuals had few legally defined rights and often did not possess legal title to the land or houses they occupied. Throughout Latin America and many other parts of the developing world, the informal sector constitutes perhaps 60 to 70 percent of the entire labor force. Unlike the industrial working class, this group of “new poor” has been notoriously hard to organize for political action. Rather than living in large barracks in factory towns, they live scattered across the country and are often self-employed entrepreneurs.

When testifying before a senate committee investigating his behavior, he said, “I got that patronage from the sheriff, the county clerk, the county treasurer, all the clerks of the different courts, the State administration … It rarely happened … that any appointments of any kind, big or little, were made in the section of the city in which I lived without my recommendation.” Lorimer also owned a number of businesses that did contracting for the city, and through a process of what he suggested was “honest graft” managed to accumulate considerable wealth. His machine, like those in other cities, catered to the interests of the huge number of immigrants and working-class voters who were flocking into the city to work in its new industries.

This highly negative narrative about interest groups stands in sharp contrast, however, to a much more positive one about the benefits of civil society, or voluntary associations, to the health of democracy. Alexis de Tocqueville in Democracy in America noted that Americans had a strong propensity for organizing private associations, which he argued were “schools for democracy” because they taught private individuals the skills of coming together for public purposes.

This seemingly minor point is in fact important in distinguishing Chinese and Western legal concepts: the latter see natural persons as bearers of rights and duties independently of any action of the state, whereas in China citizenship is something conferred on individuals by the state.

These cases illustrate the way institutional arrangements can become self-reinforcing: once the principle of electoral politics is established under a limited franchise, incumbent parties can attempt to stay in power by seeking new voters, shifting to new issues, and reaching out across class lines.22

Today, these same public-sector unions have themselves become part of an elite that uses the political system to protect its own self-interests. As we will see in Part IV, the quality of American public administration has declined markedly since the 1970s, in no small measure because of these unions’ ability to limit merit as a basis for hiring and promotion. They are an integral part of the contemporary Democratic Party’s political base, making most Democratic politicians loath to challenge them. The result is political decay.

From the earlier discussion of Europe in the nineteenth century, however, it should be clear that the middle classes are not inevitably supporters of democracy. This tends to be particularly true when the middle classes still constitute a minority of the population.

National identity is frequently formed in deliberate opposition to other groups and therefore serves to perpetuate conflict even as it strengthens internal social cohesion. National cohesion may express itself as external aggression. Human beings cooperate in order to compete, and compete to cooperate.

highly corrupt governments usually have big problems in delivering services, enforcing laws, and representing the public interest.