Much has been said and written over the past months about the health crisis caused by the worldwide spread of coronavirus and the economic crisis that arose due to the subsequent restrictions to movement and trade. Less central, although equally important, has been the consideration for the political crisis that the other two might bring about. Could this pandemic be the straw that breaks the camel’s back for democracy somewhere?
The key to answering this question is to acknowledge the rising level of inequality and recognise its detrimental role in traditional democratic theory. Once we do that, a giant like Hannah Arendt could provide us with a precious warning for the future, even for countries that are in the heart of Europe.
Middle Class & Inequality
A natural consequence of the restrictive measures that have been put in place to limit the spread of Covid-19 is a dramatic and unprecedented fall in employment and consumption. More counterintuitive is the fact that, after a rapid dip in March, the stock market has kept going up and has already erased all losses for the year (Dempsey, Elder, Lockett, 2020). Such behaviour can be explained by markets’ tendency to look ahead and by their confidence in a quick, “V-shaped” recovery.
While the Nasdaq and the S&P 500 continue to grow, poverty rates in the US are set to reach “levels comparable to the Great Recession” (Parolin and Wimer, 2020, p.1). As the rich keep amassing wealth, the US Department of Labour reports that in the week ending June 6 the total number of people claiming unemployment benefits was over 30 million (USDL, 2020, p.2). Much of this job loss in developed countries like the US and the UK is targeting lower and middle class families, whose main sectors of employment are more vulnerable to the crisis, because they are more likely to be affected by the restrictions and the fall in consumption (Allas, Canal, Hunt, 2020).
Researchers at the World Bank have shown that the share of jobs that are considered “nonessential and not amenable to telework” is distributed unevenly across Europe, damaging the weaker economies of Southern and Eastern Europe more vigorously than those of Northern and Western Europe (Garrote Sanchez, Gomez Parra, Ozden and Rijkers, 2020). They conclude that the pandemic is going to increase inequality both within and between countries in the Union.
This boost for inequality inserts itself in a world economy that was already growing more unequal. Piketty teaches us that, under conditions of slow growth, wealth tends to be accumulated more from return on capital rather than from labour (Piketty, 2013). Information gathered by his institute, the World Inequality Database, shows us that around 1980 inequalities began to rise again after they had fallen following the two world wars (WID, 2020). Although this trend does not involve some European countries, it was particularly evident in the US and in some emerging democracies, and only increased after the 2008 financial crash. The increase of wealth going to the top 1% in these conditions of slower growth is consistent with Piketty’s theory.
In the same period, the share of wealth going to the middle class, meaning the people occupying the 50th to 90th percentile, decreased (WID, 2020). This phenomenon was already destined to continue even before the pandemic: the jobs that are not being replaced by digitalisation are either well or poorly paid. Therefore job growth is stagnant, if not negative for “middle class jobs”, whereas it is positive at both ends of the spectrum (Bowles, Carlin, Stevens, 2017, 19.1).
What is important to understand is that these raw economic measurements tell us a much broader story. They signal not only challenges to finance ministers all around the world, but also existential threats to democracy. Many accounts testify that the middle class is bearing the strongest hit from the crisis, and many of its members risk sliding into poverty, similarly to what happened during the Great Depression (Griswold, 2020; Long, 2020). As a result, the part of the population that would normally represent the bridge between the elites and the poor risks to resemble the latter much more than the former, and is left feeling alienated and isolated. This creates masses of disappointed and even desperate citizens, who have lost all reference points and are looking for an answer. As they do so, they may not be overly willing to defend the same democratic regime that has put them in this position. But why would that be the case? We can look to political science for an answer.
What this means for democracy
The most popular economic explanation for democracy is called modernization theory, and it argues that as a country grows richer, the probability of a successful democratic transition and of democratic survival increases (Lipset, 1959). The basis for this theory is that as income per capita grows, the nation becomes a more mature society, one that relies less on the agricultural sector and that presents a larger middle class. Citizens in a richer country are less incentivized to gamble by supporting the unequal wealth redistribution that would come with a dictatorship. While there would be a small chance of increasing personal wealth sensibly, there would also be a big chance of becoming much poorer (Clark, Golder, Golder, 2018).
A 2007 paper demonstrated that “patterns of regressive socioeconomic distribution, or basic needs deprivation in the presence of greater development […] are destabilizing” (Reenock, Bernhard, Sobeck, 2007, p.693). This means that inequality is an important factor in determining the stability of democracies. The reason why it is not particularly destabilizing to developed democracies, according to the authors, is because those basic needs are usually met. What happens when that is no longer the norm, and middle class citizens are lining up to collect food stamps and unemployment benefits?
An extremely grim but precious caveat could be provided by Hannah Arendt’s 1951 masterpiece “The Origins of Totalitarianism”. Arendt explains that “totalitarian movements are mass organizations of atomized, isolated individuals” (Arendt, 1951, p.644-5). The existence of these masses comes about with the breakdown of the class system and the absence of any political or social stratification. While the Nazis found already very fertile ground due to the harsh economic situation of the Weimar Republic, the Bolsheviks directly engaged in the “liquidation” of classes, starting exactly from the middle-class. By destroying any stratification, totalitarians obtained a society of alienated individuals (Arendt, 1951).
In such a society, the majority of citizens are inclined to follow strong leaders not because of the contents of their totalitarian rhetoric, but because of its convincing tone and dynamism. As Arendt underlines, these movements always relied on strong popular support, which they maintained as long as they did not stay still. The objective was not to obtain a certain goal, but to continually change the target to keep the totalitarian machine going and exclude the possibility of any possible life outside the party (Arendt, 1951).
We therefore need to be very careful about the challenge that democracies face in the near future. History suggests that, as more people feel socially isolated, they will increasingly swear absolute loyalty to populist and radical movements for the decisiveness of their tone. If their leaders eventually push for more authoritarian reforms, and the masses are not particularly committed to defending democracy, the consequences could be catastrophic. And while the most developed democracies are stronger than they were in the 1930s, some are exhibiting dangerous trends that need to be constantly monitored.
Nations in transit
The NGO Freedom House publishes a yearly report on the state of 29 Eurasian countries, called Nations in Transit, evaluating the advancement of the democratic progress. Each country is scored on the basis of civil liberties and political rights, and they range from consolidated democracies to consolidated authoritarian regimes. Since 1995, never have fewer countries been considered democracies within the region of the former USSR (Csaky, 2020).
The two most significant cases, Hungary and Poland, both present governments with strong populist parties that have obtained blind trust by the masses and are using their power to erode democratic institutions. In Hungary, Viktor Orbán and his party, Fidesz, are exploiting their majority power to force unparliamentary procedures and sanction dissident lawmakers. In Poland, the nationalist Law and Justice party is conducting an assault on the judiciary, punishing judges who disagree with their rhetoric and methods, and replacing them with loyal ones.
Unless the EU quickly intervenes, the crisis could very well produce a definitive shift to authoritarian rule in the heart of the continent. Traditional democratic champs have so far failed to show their leadership and tackle rights violations within the block. This has left a space for Russia and China to creep in and extend their malign influence. Their exploitation of the specific weaknesses of each country’s political structures and support of strong authoritarian leaders needs to be fought by the EU through direct intervention to restore the legitimacy of the legislature (Csaky, 2020).
In order to defend the future of democracies everywhere, we need to acknowledge the threats that the pandemic will bring about. If not efficiently addressed through economic and social policy, the decline of the middle class could produce masses of citizens that feel lost and disappointed. What will save democracy is the engagement of a broad and active citizenry, who will show resilience in the face of hardship and defend fairness against the attacks of authoritarian leaders. The work begins now.