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Democracy in danger, can Joe Biden fix it?

House Speaker Nancy Pelosi summed Trump up, saying “he is a clear and present danger to the nation.”

ANDREW SHENG | New Delhi |

Aweek is a long time in politics. On 6 January, armed supporters of President Trump stormed the sanctity of the Capitol, the temple of American democracy. This Wednesday, President Trump became the first president in American history to be impeached twice. Next Wednesday, Joseph Biden will be anointed President, guarded by 20,000 National Guard in battle gear against not foreign enemies, but domestic threats. This was supposed to happen only in Hollywood movie scripts.

Consider these bizarre facts: the pandemic is claiming more than 4,000 deaths daily in the US; digital media like Twitter, YouTube and Facebook have banned tweets and comments by their own President; all US stock market indices are still rising, and Bitcoin has surged by 27.9 per cent in 13 days.

The article of impeachment used more stark terms than any foreign commentator would dare to employ: “President Trump gravely endangered the security of the United States and its institutions of Government. He threatened the integrity of the democratic system, interfered with the peaceful transition of power, and imperiled a coequal branch of Government. He thereby betrayed his trust as President, to the manifest injury of the people of the United States. Wherefore, Donald John Trump, by such conduct, has demonstrated that he will remain a threat to national security, democracy, and the Constitution if allowed to remain in office, and has acted in a manner grossly incompatible with self-governance and the rule of law. Donald John Trump thus warrants impeachment and trial, removal from office, and disqualification to hold and enjoy any office of honor, trust, or profit under the United States.”

House Speaker Nancy Pelosi summed Trump up, saying “he is a clear and present danger to the nation.”

Arguably, Trump has committed the sin of poisoning the well of democracy, not just in America, but for the rest of the world.

Although Western democrats extol its virtues as going back to the Greek Age, modern liberal democracy is very recent. As late as 1978, only one third of the world lived in democracies; by 2015, more than half do. But since then, populism, Brexit and Trumpism have caused many to lament that democracy is receding. Today, the gold standard of liberal democracy in America is being tested, if not questioned.

The problem is that liberal democracy based on social equality, rule of law and tolerance of diversity, is a work in progress. Given very different cultures, history, religion and institutional set-ups, democracy is practiced differently, requiring huge efforts by all citizens. Democracy that has no performance-accountability happens when what is promised is not delivered. That became evident when the 2008 global financial crisis accentuated rising social inequality and insecurity for large segments of the population. Democratic politics fragmented and did not seem to be able to deliver on promises.

Austrian economist and political philosopher Joseph Schumpeter became famous for his observation that the driver of capitalism was entrepreneurship, which led to creative destruction. He was equally original and sharp in his realistic analysis of democracy. In his classic Capitalism, Socialism and Democracy, he said four conditions must be satisfied for democracy to work: the quality of politicians in terms of ability and moral character; social consensus that democracy does not solve everything; a well-trained and effective bureaucracy; and finally, “effective competition for leadership requires a large measure of tolerance for difference of opinion.”

Schumpeter understood that democracy has difficulty in making decisions when society is deeply divided. Vote-seeking behaviour means that policies are always for the short-term, so politicians under serve the long-term interests of the nation. For example, democratic and rich countries like Australia cannot even agree on dealing with climate change, because vested interests in the mining industry consistently block change through lobbying. If democracies cannot deliver long-term structural reforms that are painful and unpopular, then in the long run, citizens will seek alternatives, such as autocracies or anocracies (democracy with autocratic characteristics).

Trump put American democracy in clear and present danger by violating all four Schumpeter conditions. First, nearly half the voting population ignored his moral issues, because they believed him when he called the mainstream news “fake”. Second, he violated many of the unspoken rules, codes and conventions that buttressed democratic checks and balances, aided by lawyers and attorneys-general whom he also threw under the bus. Third, he questioned the loyalty and efficacy of the vaunted American bureaucracy, which then failed to protect the Capitol from violent protests. Lastly, he openly sought division, rather than work in a bipartisan manner to heal social divisions.

Asians have much to learn from Schumpeter, who foresaw that democracy is about majority rule, but works in practice through an elite that deals in votes rather than in money. Since capitalism by definition values money more than labour, money under financial capitalism has a nasty habit of corrupting politics. How to control money politics from corroding diverse rights and public goods is a perennial issue in all systems of governance.

If there is one lesson that should resonate in Asia, it is that violence cannot be an answer to the democratic process. Trump realized too late that inciting violence in his supporters to protect his version of electoral victory ended up with him denouncing violence in the name of law and order. Retribution occurs to those who incite violence abroad, because violence can bounce back at home.

Next week, the Trump Reality Show will thankfully end, and life will return to some form of normality, so we can address the threats of the pandemic and job losses without being diverted by another tweet. For Trump, impeachment will only withdraw his right to hold further public office. He was made by the media, and he will be haunted by media for the rest of his life. But he will go on to earn millions from book sales and paid appearances.

The clear and present danger to democracy is a distorted system where “heads I win, tails you lose” prevails. We need to change this system, but we don’t know how to do this democratically. Perhaps Joe Biden has the answer.

The writer is a former central banker and financial regulator. The views are entirely his own. Special to ANN.