Why Are Liberal Democracies So Bad at Creating Economic Equality?

Why Are Liberal Democracies So Bad at Creating Economic Equality?

Why Are Liberal Democracies So Bad at Creating Economic Equality?

The “Third Wave” of democracy in the Global South went hand in hand with the spread of policies that hobbled the fight for greater economic equality from the outset.


This article is part of The Nation’s 150th Anniversary Special Issue. Download a free PDF of the issue, with articles by James Baldwin, Barbara Ehrenreich, Toni Morrison, Howard Zinn and many more, here.

Next to climate change, inequality is the burning issue of our time. In this regard, the evidence presented by Thomas Piketty, the United Nations and other sources is quite conclusive: the current rates of global inequality are unprecedented.

In his celebrated book Capital in the Twenty-First Century, Piketty marshals a massive amount of data to show that rising inequality has been the norm since capitalist growth took off in the eighteenth century. Now, he says, things are likely to become even worse.

The only period when there was a reversal of this flow, Piketty writes, occurred in the middle decades of the twentieth century, when what he calls “exogenous shocks”—such as wars and the social revolutions they triggered—forced capitalist elites to make economic concessions. These social compromises were largely mediated by Keynesian or social-democratic political regimes. By the last quarter of the twentieth century, however, inequality had resumed its onward march under democratic regimes implementing neoliberal policies.

Piketty’s remarks are unsettling to believers in democracy, which includes most of us. One of the things he seems to be saying, at least implicitly, is that democratic regimes—whose rise in the Global South paralleled the rise of neoliberalism in the North—don’t really work when it comes to containing economic inequality. Of course they enshrine formal political equality and institutionalize majority rule. But they are ineffective at bringing about greater economic equality.

My generation came of age—from the 1970s to the 1990s—fighting to oust dictatorships and bring about democracy in the Third World. One of our most potent arguments against authoritarianism was that it promoted the concentration of income in dictatorial cliques allied with transnational capital. We said that democracy would reverse this process of impoverishment and inequality. From Chile to Brazil to South Korea to the Philippines, fighting against dictatorship was a fight for both democratic choice and greater equality.

Yet the evidence now seems to clearly indicate that we were wrong. What Samuel Huntington called the “Third Wave” of democracy in the Global South went hand in hand with the spread of policies that hobbled the fight for greater economic equality from the outset.

Democracy and Land Reform

The Philippines offers a classic case study of the limits of liberal democracy. In the twenty-nine years since we overthrew the dictatorship of Ferdinand Marcos, many of us who fought for democratic institutions also prioritized agrarian reform, believing that this was the central project that would bring about more equality.

Things at first appeared to be headed in the right direction. With the ouster of Marcos in 1986, not only was a constitutional democracy set up, but a sweeping land-reform law—the Comprehensive Agrarian Reform Program, or CARP—was passed to give millions of peasants title to their land. In contrast to the coercive programs in China, Vietnam and Cuba, redistribution would be accomplished peacefully.

Over the next few years, however, competitive elections were reduced to a mechanism whereby members of the elite fought one another for the privilege of ruling while consolidating their control over the political system. Indeed, the vast majority of those elected to Congress came from either the landlords or the big capitalist families. One of the victims of this entrenchment of class power was CARP.

Stymied by a combination of coercion, legal obstructionism, and the conversion of land from agricultural to commercial and industrial purposes, the agrarian-reform process stalled. Ultimately, fewer than half of the original 10 million hectares designated for redistribution had been disbursed to peasants by 2008—some twenty years after the program was launched. Indeed, with little support in terms of social services, many peasants ended up reselling their land back to the landlords, while others lost their recently acquired land to aggressive legal action.

It was at this juncture that I and several other parliamentarians sponsored the Comprehensive Agrarian Reform Program Extension with Reforms, or CARPER. We had a hell of a time getting this law passed, but we finally managed to do so in August 2009. What made the difference were the peasant strikes and marches—including a 1,700-kilometer march from the southern island of Mindanao to the presidential palace in Manila—and efforts by activists to disrupt congressional sessions.

CARPER was a strong law. It plugged many of the loopholes in the original CARP, allocating some $3.3 billion to support land redistribution, seed and fertilizer subsidies, and agricultural-extension services. Most important, CARPER mandated that the distribution of all remaining lands had to be completed by June 30, 2014.

CARPER appeared to promise a new beginning. But despite monitoring and constant pushing by agrarian-reform advocates, the process of land acquisition and distribution proceeded at a snail’s pace. Thanks to landlord resistance, bureaucratic inertia and a lack of political will, some 550,000 hectares—including much of the best private land in the country—remained undistributed as the deadline arrived.

In a last-ditch effort to save the program, I personally appealed to President Benigno Aquino III, with whom my party is allied, to fire his timid agrarian-reform chief and appoint someone who would not be afraid to apply scorched-earth methods to the recalcitrant landlord class. The president—a scion of one of the biggest landed families in the country—refused.

Even as the landed elite was relying on the mechanisms of liberal democracy to subvert agrarian reform—including by exploiting loopholes in the legislation and waging expensive legal battles in court—foreign powers like the United States, the International Monetary Fund and the World Bank were seeking to refashion our economy along neoliberal lines.

They succeeded.

Democracy and Structural Adjustment

Ultimately, it was not dictatorship but a democratically elected government that passed the automatic appropriations law that allowed foreign creditors to have the first cut of the Philippine budget. It was not a dictatorship but a democratically elected government that brought down the country’s protective tariffs to less than 5 percent, thus wiping out most of our manufacturing capacity. It was not a dictatorship but a democratically elected government that brought us into the World Trade Organization, opening our agricultural market to the unrestrained entry of foreign commodities and leading to the erosion of our food security.

Today, even as the elites battle it out in the Philippines’ thriving electoral arena, the rate of poverty—at nearly 28 percent—remains unchanged from the early 1990s. True, the economy has grown—but all of the studies show that the rate of inequality in the Philippines remains among the highest in Asia, underlining the fact that the fruits of growth continue to be appropriated by the top stratum of the population.

This isn’t to say that key reforms have not taken place. A reproductive-health law critical to advancing women’s rights was passed in the teeth of opposition by the Catholic Church. Civil-society pressure forced the abolition of the pork barrel, unprogrammed government funds given by the executive to members of the legislative branch in order to keep them on a short leash. A conditional cash-transfer program was instituted to provide direct income support to more than 4 million poor families. These, however, were small oases of reform in an overwhelmingly conservative social landscape.

Today, I sit in a legislative chamber in which roughly 80 percent of the members come from old and newly rich local elites—people who personify the Marxist dictum that economic power translates into political power and believe that this is the natural order of things, even as they declaim against inequality and corruption and extol democracy at every turn.

A Global Trend

The Philippine experience has been repeated throughout the Global South. Ironically, the liberal democracy we fought for in order to free ourselves from dictatorship became the system for our subjugation to local elites and foreign powers.

Even more than dictatorships, Western-style democracies are, we are forced to conclude, the natural system of governance under neoliberal capitalism, for they promote rather than restrain the savage forces of accumulation that lead to ever-greater levels of inequality and poverty. In fact, liberal-democratic systems are ideal for the economic elites, since they feature periodic electoral exercises that promote the illusion of equality, thus granting these systems an aura of legitimacy. The Philippines, it might be noted, has long been painted as a “social volcano.” This volcano does occasionally shake, rattle and roll, but it never quite explodes the way real volcanoes do. A key reason is that the electoral system serves as a safety valve, holding out the possibility of change “if only the right people are elected to office.”

Toward a New Democracy

However, the solution to the crisis of inequality is not to abandon democracy, as the Jurassic right would like (including the nostalgic pro-Marcos fringe in the Philippines), but rather to deepen it. To reverse this situation requires not just an alternative economic program based on justice, equity and ecological stability, but a new, more direct and more participatory democratic system.

People power must be institutionalized for periodic interventions against corruption and accumulated power, not abandoned once the insurrection has banished the old regime. Among the most important features of this new democracy, representative institutions would be balanced by the creation of other institutions enabling direct democracy. Civil society would organize itself politically to act as a counterpoint to—even a check on—the dominant state institutions. Citizens would nurture and maintain a “parliament of the streets” that could be brought to bear on the decision-making process at critical points: the institutionalization, if you will, of a parallel “people power.” Citizen socialization must move away from the idealization of liberal-democratic reforms and instead bring people together in the formulation of new, more participatory democratic arrangements. Likewise, equality—in the radical French Revolution sense of the term, not simply the bourgeois notion of “equality of opportunity”—must be brought back to center stage.

Finally, unlike in a liberal democracy—where most people participate in decision-making only during elections—political participation must become a constant activity, with people evolving into active citizens.

Theorizing the features of a “new democracy” is one thing; bringing it about is another. What forms of struggle must we employ to leap from the old to the new regime? We must not give up the battle for reform via the mechanisms of representative electoral democracy, but we should combine it with political mobilization outside the parameters of the liberal-democratic regime. Insurrectionary methods, exactly like the people-power uprisings in the Philippines, the Middle East and Eastern Europe, must be part of the repertoire of progressive groups.

Triggers of Change

The big question is: How do we bring about such fundamental reforms at a time when organized elites and disorganized, quiescent citizenries appear to be the norm in both the Global North and Global South?

Noting that “the long-term dynamics of the wealth distribution are potentially terrifying,” Piketty asks whether the only real solution lies in violent reactions and radical shocks, such as the wars and revolutions of the first half of the twentieth century.

Perhaps we are in for some of those violent reactions and radical shocks. Perhaps the current developments in Iraq and Syria are not marginal events, but rather explosions that will sooner or later occur in other regions, including the North. When the political explosions occasioned by inequality and the search for identity are combined with what many foresee as the dire social consequences of the climate apocalypse, then perhaps we are not too far away from catastrophic change after all.

Will liberal democracies survive and manage these exogenous shocks as they did in the mid-twentieth century? This is by no means guaranteed. Indeed, they may just as easily be overcome by internal and external pressures, leaving future historians to wonder—as the philosopher Richard Rorty puts it—why the golden age of democracy lasted only about 200 years.

This article is part of The Nation’s 150th Anniversary Special Issue. Read the full issue, with articles by James Baldwin, Barbara Ehrenreich, Toni Morrison, Howard Zinn and many more, here.

Walden Bello, a Nation contributor since 1976, was until 2015 a member of the House of Representatives of the Philippines. An earlier version of this piece ran on teleSUR. 

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