Edge of Chaos: Why democracy fails to deliver economic growth – and how to fix it
Edge of Chaos: Why Democracy Fails to Deliver Economic Growth – and How to Fix It by Dambisa Moyo. Small, brown, 296 pages, £20
Who should govern a society? How should governors be selected? What powers should a government have and for what purpose should they be exercised?
These questions have preoccupied philosophers ever since individuals have lived within societies. A life of solitude means that these questions have no relevance. Living among others means they cannot be avoided.
The ancient Greek philosopher Plato was one of the first great thinkers to tackle these questions in depth. His work, The Republic, written in 380 BC. J.-C., asked what political order could ensure a just society. Plato warned of the dangers of popular democracy. Unhindered freedom can lead to anarchy. Democracy is vulnerable to demagoguery.
His famous solution was a government of philosophers. These enlightened souls would be trained in a variety of disciplines, from gymnastics to military service. Absorbed from the potential corruption of private property, their sole focus must be the common good.
Exploring these age-old questions and the potential dangerousness of some of their answers is a central theme in the latest work of American economist Dambisa Moyo.
If the title of the book, edge of chaosdoes not inspire joy, then the subtitle, Why democracy fails to deliver economic growth – and how to fix itis even clearer about our dissatisfactions.
The first chapters are dark. Economies fail to deliver inclusive and sustainable income growth. Moyo is also damning for the state: “No matter what the government does, it seems to be failing.”
These reinforcing failures lead the author to argue that “the defining challenge of our time is to create strong and sustained economic growth that continues to significantly improve people’s lives.”
Obstacles to inclusive growth are aptly described as ‘hurricane headwinds’. These include the impact of private and public debt, changing demographics, climate change and declining productivity.
The challenges are indeed great. But the author seems oblivious to any recent progress. The latest global economic outlook from the Organization for Economic Co-operation and Development (OECD) recognizes that global income per person is 10% lower than it could have been if it had grown at the same rate as the two decades preceding the crisis.
However, growth in developed economies between 2016 and 2019 matched and even exceeded growth between 1990 and 2007.
Likewise, unemployment in developed economies has now fallen below pre-crisis levels. America, for example, has created almost 19 million jobs since the crisis.
Moyo would probably reply, if everything is so rosy, why are established political orders and parties currently in trouble? The author focuses precisely on a central political issue of our time.
This book is clear where the culprits lie, “political myopia is the central obstacle on the path to growth in advanced economies”. Governments “will always opt for short-term quick fixes that tend to undermine long-term growth.”
The solutions proposed by the author aim to overcome this short-sightedness. They aim to propose a “project for a new democracy”.
Some of the proposals are conventional. Restricting campaign contributions is an established feature of some liberal democracies. But echoes of Plato resonate as Moyo charts further changes. Candidates, for example, must have minimum qualifications to hold a position.
These qualifications are distinctly technocratic, with a call for candidates “more likely to understand the kinds of policies needed in a modern economy than those conditioned by a regime of polls and political tactics”. The queen and philosopher king is back.
But if the echoes are familiar, so are the dangers. The reviews of The Republic warned of the erosion of democracies and the threat to civil liberties by the interests of an overly strong state.
It’s hard not to be reminded of these warnings as Moyo advocates changes to voting rights. The power of each individual vote should be modified to reflect the status and civic engagement of each voter.
The change plan advocates that the impact of a citizen vote “could also be linked to one’s professional qualifications…(and)…employment status…and level of education, in assuming that excelling in these areas is more likely to make informed choices in the voting booth.
This, combined with a proposal to lengthen electoral cycles and create an unspecified ability for policy makers to “tie their governments and successors more firmly to politics”, casts doubt on the intrinsic value of democracy. Inclusiveness seems to be a valuable dimension of economic growth, but not of democracies.
This fear is reinforced by a call for private companies to play a greater role in public affairs and lead the implementation of these proposals.
The first chapters offer an incisive analysis of our economic challenges. Political solutions are just as dangerous as the chaos the author seeks to avoid.
Paschal Donohoe TD is the Minister for Finance and Public Expenditure and Reform