This week, The Economist magazine ran an interview with Nicolas Berggruen and myself as well as an excerpt of our new book, “Renovating Democracy: Governing in the Age of Globalization and Digital Capitalism.” We’ve reproduced that below.
Also, we held a conversation at the Commonwealth Club in San Francisco moderated by LinkedIn co-founder Reid Hoffman. You can view that here.
The Economist: You argue that we need to “renovate democracy.” But another way to see things is that democracy is working just fine, it’s just that the outcomes don’t appeal to comfortable cosmopolitans… What makes you convinced that democracy is broken?
Nathan Gardels and Nicolas Berggruen: Well, what we are seeing is the result of elections. But democracy is as much about what happens outside the ballot box: impartial rules, practices, institutions—and political culture—that are not only inclusive, but that foster the reasoned discourse, negotiation and compromise necessary to reach a governing consensus in diverse societies.
In recent decades this system has decayed. The mainstream political parties were captured by the organised special interests of an insider establishment that failed to address the dislocations of globalisation and disruptions of rapid technological change. This led to a deep distrust of governing institutions by all those left behind. Such disaffection gained more traction than ever before because of the participatory power of social media.
When an unresponsive elite forsakes the average citizen in a system legitimated by popular sovereignty—and fortified by social media—demagogues who fashion themselves as tribunes of the people ride the rage to power. Thus the Brexiteers and Trump.
The danger now is that the fevered populists are throwing the baby out with the bathwater, assaulting the very norms and institutional checks and balances that guarantee the enduring survival of republics. The revolt against a moribund political class has transmuted into a revolt against governance itself. The result is protracted polarisation and paralysis.
The chief challenge now is not for partisans to put their teams back in power through elections, but to mend the breach of distrust between the institutions of self-government and the public. This can be done by integrating social networks and more direct democracy into the system. It needs to be “mediated” by new, deliberative practices that complement representative government and compensate for its waning legitimacy. In our book we call this “participation without populism.”
To take but one example, if such a platform for citizen’s deliberation linked to a public vote had been in place before the Brexit referendum, all the consequences we now know would have been aired and the outcome would have been different.
The Economist: Among your solutions to the problems of wealth inequality is a scheme for people to own an equity stake in the robots that will run tomorrow’s economy. How would that work?
Messrs Gardels and Berggruen: The point here is that, as digital capitalism divorces employment and income from productivity growth and wealth creation, making a living through gainful work will diminish. The best way to address inequality then is to spread the equity around by fostering an ownership share by all in companies where productivity growth is driven by intelligent machines that displace jobs. The aim is to enhance the skills and assets of the less well off in the first place—that is, “pre-distribution”—instead of only redistributing the wealth of others after the fact. We call this universal basic capital in the book.
This can be done in a conventional way through savings accounts in which all participate who are invested in mutual-fund-type instruments. “Platform cooperatives” are another way: for example, everyone in a neighborhood could own a piece of ride-sharing services that operate there, or those who share their personal medical data would get a royalty payment from pharmaceutical inventions based on that data. The public could be assigned equity shares of any IPO by companies that benefited from publicly funded R&D. Another way, as California Governor Gavin Newsom has proposed, is a “data dividend” for the use of your personal data by big tech.
The Economist: You call for a pact between America and China to ensure global order. What is the role of Europe in this world? Will Africa and Latin America need to “choose sides,” so to speak?
Messrs Gardels and Berggruen: The return of China to centre stage, not least through its Belt and Road initiative that will revitalise Eurasia, shifts the centre of gravity of the world order eastward. To maintain a civilisational presence in this new constellation, the bond between America and Europe is more important than ever. In a way, China’s rise forges a new common identity for the West.
At the same time, within this common identity, Europe’s social model can soften the harsher edges of America’s free-for-all market mentality. For example, it has already done so on digital privacy and leading the way on “flexicurity” policies, as some Nordic nations have, that protect workers instead of jobs through universal social benefits not linked to employment.
If things are left to float as they presently are, Latin America, and Africa in particular, will have to choose. But there is an alternative. Instead of flatly rejecting China’s Belt and Road project like Stalin did the Marshall Plan, the West could join it and thereby ensure more transparency and debt sustainability. Further, Europe in particular, could complement China’s hard infrastructure investments in Africa with soft-infrastructure investment in health, education and good governance. This would not only mitigate the need to choose sides, but also stem the growing flow of migration northward from the Africa continent.
The Economist: You write: “A new dark age could descend in some regions where tyrants abuse their subjects and where jihadists or criminal gangs roam freely to terrorize dispossessed populations.” The alternative is a strongman to restore order. How can we realistically find a democratic solution?
Messrs Gardels and Berggruen: Such forces arise when there is a vacuum of power and authority. The refugee and immigration crisis emanating from Central America, for example, is not the result of strong states persecuting their citizens, but of weak states that can’t protect them.
In this respect, the Western military interventions and misguided attempts to “nation-build” other’s nations, for example in Libya and Iraq, have worsened the situation. ISIS arose in such a vacuum.
To fill the vacuum, first comes security, the rule of law, sound governance and development. Then comes democracy, which can only organically emerge out of those conditions. Change will only take hold if made by those who own it. To put the cart of democracy defined by the pro-forma exercise of elections before the horse does not work. It inevitably deepens the divisions in society instead of repairing them.
The Economist: Many problems you identify are about managing pluralism. The world is pressed together like never before, and perhaps we’ve globalised quicker than our mindsets could adapt. Is there a solution to the tribalism, which is influencing our politics?
Messrs Gardels and Berggruen: It is no surprise that those left behind by the enormous and rapid changes of recent years are seized by anxiety and the sense they’ve lost control over their destiny to distant institutions run by strangers.
While economic globalisation and technology have moved the world toward convergence of unprecedented scope and at a swift clip, the cultural and political imagination engenders the opposite. It creates a search for shelter within the familiar ways of life, that register a dignity of recognition among one’s own kind and constitute identity against the swell of seemingly anonymous forces. When people retreat into their own suffering, better angels lose their wings. Then politics becomes tribal: us versus them.
Tribalism will only diminish to the extent the excluded recover a meaningful role in owning their future. Above all, that means renovating the practices and institutions of democratic deliberation so they are genuinely inclusive instead of captured by organised, special interests or demagogues who play on emotions without delivering the goods.
One World, Many Systems
From “Renovating Democracy” (University of California Press, 2019) by Nathan Gardels and Nicolas Berggruen
As national sovereignty reasserts itself and one size of globalization does not fit all, one world with many systems will characterize the international order in the decades ahead. A new modus vivendi that accepts this reality must be found among different cultures and civilizations now tied together as never before in a web of mutual dependence—a web in which the weight of the global economy has shifted from the once-regnant developed world to the emerging economies.
For this evolution to unfold with a modicum of stability, the success or failure of diverse models of governance that arise out of plural civilizational and cultural contexts must rest on competition over results, not on the dogma of a dominant ideology, interference by others, or imposition by force—in short, a global system of “diverse equilibrium” in which the power of example, not the example of power, prevails. That is what globalization in which “one size does not fit all” will look like.
Paradoxically, Donald Trump’s “America First” posture may turn out to be the midwife of such a new equilibrium. By rejecting the Paris Climate Accord, pulling out of trade agreements, parting ways with the United States’ European allies, and shirking the country’s long-standing liberal internationalism, he is paving the way for an alternative order in which the United States as a nation-state is no longer the dominant player. By default, those who move in to fill the vacuum will determine the new balance of power. By withdrawing from a leadership role in shaping globalization, the United States doesn’t stop the process; it only opens the path for the rise of new players.
On climate change, for example, we have already seen in response the emergence of a “network of the willing”—ranging from China and the European Union to subnational entities like the state of California—to carry on global cooperation. Through California Governor Jerry Brown’s leadership before he left office earlier this year, 188 subnational entities in 39 countries on 6 continents are pushing ahead to implement the Paris Climate Accord despite its abandonment by official Washington. Former World Trade Organization chief Pascal Lamy even talks of a “plurilateral” world order of nongovernmental organizations, businesses, and subnational entities instead of a “multilateral” order based on nation-states.
While all nations and networks must have their respected place in any globally inclusive arrangement, in the end the key pillars of such an order, in which the management of convergent interests is bound by commonly agreed rules, must be the United States and China—the world’s two largest economies, which also represent highly distinct civilizational spheres. For globalization to work, it needs leadership. Yet, as the late Zbigniew Brzezinski pointed out, neither the United States nor China can lead on its own. American power has diminished, and China is not yet ready or able to step up to the plate, and may never be prepared to take on the role.
If both fail to buy in as indispensable partners, such an order can’t take hold globally. The urgent concern is that these two giants are headed in opposite directions. As former Australian prime minister Kevin Rudd has eloquently put it, “In the absence of a common narrative shared by the United States and China, the two nations are likely to drift more rapidly apart. Trust builds on itself just as distrust builds on itself as well, compounding into deep enmity over time.” Time is short, and distrust is building.
The alternative to a world order anchored in a partnership of its two most influential nations looks grim. Alongside the new networks of the willing, swaths of pandemonium fostered by the unwilling will likely then surround gated outposts that are linked to one another but divorced from their planetary hinterland in a kind of global apartheid system.
A new dark age could descend in some regions where tyrants abuse their subjects and where jihadists or criminal gangs roam freely to terrorize dispossessed populations. That so much of this sounds familiar—the brutal carnage of the Syrian civil war being the most tragic case in point—is a frightening indication of just how real the peril is. And, as we have further seen in the enduring refugee crisis and wave of mass migration, those who can flee will seek to breach the gates in search of a better life on the other side. In many ways, this is the price of leaderless globalization left to its own dynamics without effective cooperation or governing institutions.
At the height of the Syrian refugee crisis in 2015, Antonio Guterres, then the United Nations high commissioner for refugees and now the UN secretary general, warned that such a world was already in the making: “We live in a period in which we no longer have a unipolar or bipolar world. We don’t even have a multipolar world; it’s kind of a chaotic world where power relations have become unclear. When power relations are unclear, impunity and unpredictability tend to prosper. That, I believe, is the reality behind the high levels of displacement that are taking place in today’s world.”
But partnership between the United States and China is far easier said than done. Unlike the transatlantic order now receding, which was bound together at its core by common cultural and political foundations, the United States and China come from very different civilizational roots. The Middle Kingdom has historically defined itself by its centrality and uniqueness in the world going back millennia; the United States’ comparatively young identity is associated with universality and the mission of spreading its values. China’s geopolitical model has always been that of a dominant power surrounded by tributaries. By contrast, the United States, following the experience of Europe after the Treaty of Westphalia gave birth to the nation-state, has managed its international relations by seeking a global balance of power among states. A “cross-civilizational” partnership between these two traditions is unprecedented.
With respect to China’s role in its own region, Henry Kissinger’s formula is the most realistic arrangement for the next twenty years. “It’s understandable that China wants to keep foreigners from approaching its borders and it therefore undertakes a defense effort to that end,” he says. “I particularly understand it in light of China’s history. It’s also understandable that the United States doesn’t want any region dominated by a superpower, so that creates a certain balance. The two elements in that balance, namely China and the United States, also have to lead in cooperation.” Kissinger has rightly come to understand that, in today’s linked world, we need a fresh approach: partnership must become an integral part of the balance of power in any new geopolitical arrangement. The danger of war looms most menacingly if the balance of power is reduced to only a military dimension. With no common intent on any front, all else will dwell in the dark shadow of distrust in which each will seek advantage over the other.
For a US-China partnership to work, as Chinese diplomat Fu Ying once told Kissinger, the United States must be able to accept China as “an equal brother.” But that goes both ways: China must also step up with a global perspective on its responsibility that it has never before held—not as an honorary member of the Western club, but as coarchitect of world order. This recognition is the cornerstone of a strategy of evolutionary stability that aims to avoid a power vacuum by maintaining order over the slow course of change.
As difficult as it may be for the United States to share leadership in the Asia-Pacific region that it has dominated for decades, it will also be a big concession for China to embrace the notion of a balance of power instead of a series of tributaries. In the end, where differences remain, the two nations must ensure their mutual interests by accommodating each other with these principles of security: restraint in the use of power, reciprocity in actions taken, transparency over intentions, and sufficient capabilities and resilience to assure the ability to strike back and restore equilibrium if attacked.
The new global order we envision on the basis of the United States and China as indispensable partners would accommodate the return of diversity from a long interlude of hegemony—for the first time in history “diversity connected in real time”—and would be structured geopolitically as “one world, many systems.” This new rules-based system would be a kind of “Westphalia plus” in which partnerships on global issues of concern to all form a constituent part of the balance of power between and among states—in other words, a system in which trust-building cooperative arrangements and institutions are not an alternative but themselves a factor in the overall configuration of power.
To stabilize world order on these terms, the United States and China must serve as guarantors of global public goods—open trade and investment, stable financial flows, climate protection, freedom of travel and navigation, sharing of health knowledge and scientific advances. The cornerstone of a “non-value-based” partnership founded on convergent interests will inevitably have to coexist with “value-based plurilateralism” among the like-minded. Its role would be to mobilize joint efforts of those whose values are aligned in the pursuit of common ends without resort to the use of force or organized subversion against others—with the exception of the most egregious humanitarian violations by a state or organized groups within a state. When values conflict, “taking a stand, not taking sides” would be the modus operandi.
Excerpted from “Renovating Democracy: Governing in the Age of Globalization and Digital Capitalism” by Nathan Gardels and Nicolas Berggruen, published by the University of California Press. © 2019 by the Regents of the University of California.