Social democracy, unbridled capitalism, and right-wing populism

An earlier post raised the question of popular support for -- satisfaction with -- the state of democracy in many democratic nations. It was noted that levels of satisfaction are low in many democracies -- US, UK, France, and Spain, for example (link). There I defined liberal democracy in these terms: a political system in which there are strong protections for the rights and liberties of all citizens, including minority groups, and which embodies effective institutions of electoral representative democracy and equal rights of political participation. We were then led to question whether citizens in a liberal democracy would develop strong "civil loyalty" to the institutions and values of democracy.

But this is deliberately a narrow way of posing the question. It asks a question about the political institutions of a country, but is silent about the economic and social institutions. And it is possible, or likely, that dissatisfaction in the US, UK, or France is based on economic or social dissatisfaction rather than frustration with the system of individual rights and majoritarian government by itself. So, for example, Justin Gest argues in The New Minority: White Working Class Politics in an Age of Immigration and Inequality that the marginalization and disaffection of white working class men and women in Youngstown, Ohio, and East London, UK, stem from social and economic causes as well as frustration with the system of electoral politics in which they find themselves.

There are at least two important schools of thought about the character of the social and economic arrangements suitable to a free society of equals. The laissez-faire philosophy -- unbridled capitalism -- entails that property rights should be subject to minimal constraint, and only for the purpose of fair taxation in support of legitimate (and limited) governmental functions. This philosophy depends upon a specific theory of liberty -- liberty to own property as a fundamental aspect of one's nature as a free human being. Freedom means pursuing one's own plans in one's own way, without unjustified interference by the state. This is an idea familiar from John Locke and Robert Nozick.

The social-democratic philosophy takes "freedom" in a broader and more comprehensive form: a person is free when he or she has both the liberty and the capacity to pursue important life objectives in an autonomous way. And having the capacity means having access to the basic essentials of a fully productive life: adequate income, effective education and training, decent housing, sufficient nutrition, access to healthcare, and security in the face of life's common sources of insecurity. On this conception of freedom, the state needs to be organized in such a way that the political liberties of individuals are respected and -- through one set of institutional arrangements or another -- individuals have the ability to develop and realize their talents through access to these essentials of life. This positive conception of human freedom -- "freedom to ... " rather than "freedom from ..." -- has its affinities with the political philosophies of Rousseau and Sen.

More specifically, the social-democracy philosophy holds that property rights can be constrained for two separate reasons: for the purpose of limiting "invidious and unjustified" economic inequalities, and for the purpose of supporting the costs of government programs that provide amenities to citizens: free public education, access to healthcare, unemployment and disability insurance, housing assistance, childcare assistance, nutrition assistance, .... There is also an underlying idea about society as well — not simply a neutral playing field where individuals compete against each other, but as a system of cooperation in which everyone gains from the cooperative actions of others.

Suppose that we are thinking of a liberal democracy as including these elements, with a choice in the "flavor" of economic arrangements:

1. Constitutional guarantees

a. a constitution establishing key human rights and freedoms -- freedom of thought and expression, freedom of conscience and religion, freedom of association, equal rights under the law.

b. a political system of equal rights of political participation -- voting, competing for office, advocacy of policy and legislative initiatives, ...

c. an effective constitutional protection for full and fair equality of economic and social opportunity

d. a representative democracy embodying the principle of equality of influence for all citizens (no privileging of influence for one group or community over another through artificial barriers to participation)

2a. Social democracy

a. a social-economic system that limits the extent of inequalities of wealth and income
b. a social-economic system that succeeds in satisfying the basic human needs of all members of society -- education, healthcare, access to decent housing, ...
c. a system of law and regulation that ensures public health, wellbeing, and safety
d. a fiscal system that suffices to ensure limitations on wealth and provision of mandatory social services and benefits

2b. Laissez-faire democracy

a. a social-economic system that enables all citizens to purchase and sell capital and labor power through fair markets without coercion.

b. a minimal "social security" net to prevent starvation in times of dearth.

c. a system of law and regulation that maintains public order, enforces individual rights, and ensures the requirements of a fair market system.

d. a fiscal system that suffices to provide funds necessary for (b) and (c) as well as national defense.

Liberal laissez-faire democracy is characterized by (1) and (2b), while liberal social democracy is characterized by (1) and (2a), and the major ideological divide between progressives and conservatives involves disagreement over the choice between (2a) and (2b). 

Now we can ask two fundamental questions. Which system is likely to be supported by a majority of citizens through the democratic political processes guaranteed by a constitution along the lines of (1)? And which system is likely to give rise to strong sentiments among its citizens of civic loyalty and satisfaction for the resulting social-economic-political system?

Many people would argue that a society is unjust if there is such a division between rich and poor that -- as a practical matter -- the life prospects for the less-well-off are dramatically worse than those of the rich. The laissez-faire model (2b) is almost certain to lead to exactly such extreme inequalities between rich and poor, and to create a social and economic environment in which the wellbeing of the well-off is dramatically and visibly superior to that of the less-well-off. And, further, it can be strongly argued that the provisions of (2a) work to substantially lessen those unjust inequalities. 

This would be a reason for citizens in the less-well-off population to support legislation establishing the provisions of (2a); and given the relative sizes of the populations of privileged and non-privileged people, one might expect that there would be an electoral majority in favor of (2a). But the history of many western democracies suggests that the political consensus for the measures of social democracy -- a strong welfare state -- is difficult to sustain. Conservative and right-wing populist parties are currently in the ascendant.

So we seem to have reached a conundrum: liberal social democracy is likely to do a substantially better job of ensuring the freedoms and wellbeing of the great majority of the population than liberal laissez-faire democracy, and the level of satisfaction and civil loyalty of the majority of the population is likely to be higher under this system than its contrary. And yet the political strategies available to conservatives -- including strategies of ethnic, racial, and regional antagonism and division -- have often permitted them to gain electoral support for the provisions of laissez-faire economic arrangements. They can't make their political arguments on the basis of traditional conservative economic arguments, which have all the persuasive power of a really great North Korean feature film -- that more inequality is better for everyone because growth trickles down, or that corporations are naturally disposed towards enhancing the public good, or that "creative destruction" and loss of decent jobs is good in the long run; so they are forced to turn to "cultural" issues.

Seen in this light, the politics of right-wing populism make sense as a winning strategy through which economically privileged groups  are able to gain the support of working class voters in favor of economic and tax policies that objectively work to their disadvantage. Racism, nationalism, divisive demagoguery, and hot-button "social" issues like abortion, gun rights, and the Confederacy prove to be potent political motivators. But the irony is that a successful social democracy might well have created conditions of fairness and equality for all segments of society that would deflate the appeal of right-wing populism.