Chapter 2
This chapter examines some of the most significant current debates on democracy. It suggests, as an organizing principle for the discussion to follow, that democracy has always been and remains a contestable concept and practice and that to understand democracy one needs to understand this contestability in its historical, intellectual, and political context. Consequently, in the current era, the nature and implications of democratic politics and democratic governance must necessarily be located as part of a larger contemporary debate over neoliberalism and the neoliberal world order within which, to an overwhelming degree, the debate over democracy now takes place.
The fate of democracy under neoliberalism is particularly complex, and its contestability is particularly fierce. This is because neoliberalism projects its theory and practice as entirely compatible with democratic principles and practices while its critics argue that neoliberalism is, by definition, antithetical to these principles and practices. The critical argument, more precisely, is that the neoliberal image of democracy is, at best, severely limited, and that for the most part it represents the interests of corporate capitalism, of the major states in the global community, and of a transnational elite able to take advantage of the educational, cultural, and market opportunities intrinsic to neoliberal globalization.
The neoliberal attitude toward democratic freedom, for example, was captured most incisively by Karl Polanyi more than sixty years ago, when he spoke of the perspective of Friedrich Hayek, one of the founding voices of neoliberalism, as ultimately, the “freedom for those whose income, leisure and security need no enhancing,” as against those looking to “democratic rights to gain shelter from the power of the owners of property.”1 Another dimension was added to this debate by Franklin Delano Roosevelt, who, pondering the devastation of the Great Depression of the 1930s, affirmed a particular meaning to democratic society, in which social justice is an intrinsic factor and in which democracy is “meaningless in the face of economic inequality.”2
In taking a similar stance in this book, we do not seek for a moment to idealize democracy. We acknowledge that it has never existed in a pure form, devoid of power politics, ideology, or social injustice. We acknowledge too that an idealized notion of direct or classical democracy is unfeasible, even though our preference is for a “popular” democracy with broad emancipatory goals and practices. From this perspective, democracy can be said to exist where the dispersal of political and economic power is dependent upon the decisions made by an informed and freely participating majority and where democratic participation is understood as part of a process designed to change unjust political and economic structures and relationships.
We therefore agree with Lakoff and Smith, who emphasize the shared social responsibilities and obligations of a functioning democracy in the twenty-first century. Democracy, they insist, must be a public enterprise, not a private enterprise. What this means, more precisely,
is that there is no such thing as a “self-made” man or woman or business. No one makes it on their own. No matter how much wealth you amass, you depend on all the things the public has provided—roads, water, law enforcement, fire and disease protection, food safety, government research, and all the rest. . . . Public life depends upon recognition of our equal humanity. This is why Democracy is, and must remain, public.
To the very rich, they suggest, “the only question is whether you have paid your fair share for all we have given you.”3 It is in this broad context that we suggest here that while neoliberal democracy represents itself in the participatory and social-justice terms often associated with it, this is neither its purpose nor its actuality. Instead, we suggest, a neoliberal democracy is both intellectually and structurally designed to serve the interests of the capitalist market and of a systemic status quo that dominates global society in the early twenty-first century, a status quo that does not seek to privilege genuine political participation and social justice but profit maximization and corporate elitism. In this regard, democracy in a neoliberal context is, at best, a severely limited form of “market democracy” and is riven with antidemocratic tendencies and motivations.
In this regard, neoliberal globalization is not only an economic ideology but also a broad political project that aims to create a social and cultural environment supportive of corporate interests. It is, in this sense, a political and normative project designed to create a particular kind of world and particular kinds of democratic citizens. As Wendy Brown puts it, “Neoliberal rationality . . . involves extending and disseminating market values to all institutions and social action,” and “all dimensions of human life are cast in terms of market rationality.” Further: “Neoliberalism does not simply assume that all aspects of social, cultural, and political life can be reduced to such a calculus; rather, it develops institutional practices and rewards for enacting this vision . . . through discourse and policy promulgating its criteria, neoliberalism produces rational actors and imposes a market rationale for decision making in all spheres.” Brown goes on to argue that neoliberalism seeks to transform democracy into a formal shell, in which individual citizens become effectively passive recipients of an economic rationality as political “common sense.” A neoliberal democracy thus encourages
the extension of economic rationality to all aspects of thought and activity, the placement of the state in forthright and direct service to the economy, the rendering of the state tout court as an enterprise organized by market rationality, the production of the moral subject as an entrepreneurial subject, and the construction of social policy according to these criteria.4
Integral to this neoliberal perspective, unsurprisingly, is the desire to globalize its economic rationality, its entrepreneurial subjectivity, and its limited market democracy. And while democracy has many times before been globally prescribed (e.g., via colonialism and modern “just war” doctrines), neoliberalism utilizes the great technological achievements of the current era to radically compress time and space in the quest for a single global-market society in which free trade and free movement across borders of people, goods, services, and ideas are seen as the foundation of liberty and freedom and in which the nation-state becomes the facilitator and protector of market freedom. In this global quest, the traditional liberal discourse of democracy and the promise of participatory politics is a crucial legitimating factor. How else, for example, can the diminishing luster of the “trickle down” theory be sustained among peoples, cultures, and communities witnessing the widening gaps between rich and powerful minorities and poverty-stricken majorities?
This is a theme we will return to, in detail, in chapters 3 and 4 in particular. In this present chapter, we touch upon it shortly in relation to a form of democracy known as “polyarchy,” which, we suggest, following Sheldon Wolin’s lead, is most appropriate when considering the issue of democracy in the United States, in many ways the exemplary site of neoliberal power and influence in the world. Suffice it to say for now that when the U.S. political elite speak of democracy promotion and when its economic elite enthuse about the globalizing of democracy, it is the polyarchal form of democracy they refer to—a limited, “managed” democracy in which minority interests are protected and enhanced even while a formal and often extravagant fealty is paid to the rule of the majority, primarily via the election process. We look at events in Iraq, in particular, as an example of a globalized polyarchy in action as part of the U.S. democracy-promotion strategy.
More immediately, the discussion to follow explores the neoliberal phenomenon and its attitudes to democracy in detailed intellectual terms. It asks what its major ideas are, how it operates in practice, and how it came to its hegemonic status in the contemporary era.
Neoliberalism: Theoretical Foundations
Like everything else concerning the debate over neoliberalism, the issue of its nature, origins, and rise to global prominence is contentious. But in theoretical terms, the character and motivation of the neoliberalism that has dominated the global political economy since the 1970s can be usefully gleaned by reference to the influences upon it of Friedrich Hayek and the Austrian school of free-market economics (e.g., von Mises), which represented its position as a corrective to socialism in the 1920s and 1930s, and, since the 1950s, by the “monetarism” of the so-called Chicago school of economics, which was implacably opposed to Keynesianism and interventionist perspectives of all kinds in the post–World War II era. The influence of Milton Friedman is particularly significant in this latter context.
The foundational philosophical components of neoliberalism are perhaps best articulated in von Mises’s Human Action (1949), which is grounded in an epistemology of methodological individualism and in a praxeology of human decision making, which seeks to explain how individuals satisfy their fundamental needs for security and prosperity via economic calculation, that is, via the application of economic rationality to decisions matching means to ends. This essential human action is expressed most naturally and effectively, von Mises argues, in a modern capitalist system, where informed cost-benefit decisions can be made against a market-based criterion for success and failure—monetary profit. In other words, the capacity to make profit from decisions made in market competition (calculated in regard to the competitive market price) is the foundation of individual rationality and social freedom in modern societies.
Economic rationality thus (the efficient matching of means to given ends through rational calculation) is also, from this perspective, the marker of democratic progress more generally because it provides a natural and objective social space within which all market actors might operate, irrespective of their social background. Macroeconomic social planning, such as that engaged in by the Soviet Union, would distort these natural calculations, suggest von Mises and others, such as Milton Friedman, who insisted in the 1960s and 1970s that the connection between free markets and democracy is direct and logically insurmountable—free markets require social and political liberty in order that individuals are free to (rationally) choose the means to their economic ends—and this means/ends process is only available to all within a genuinely free-market environment.5
Governments should not intervene in this free-market environment because such intervention distorts the processes by which the natural prices of goods and services are set in competitive markets. Without genuine market competition, thus, there can be no genuine pricing system in a complex economy and no rational and efficient means to allocate capital goods productively. For von Mises and Hayek, and those subsequently to become neoliberals, this is why socialism and/or interventionist approaches are bound to fail in the long run and end up in the corrupt inefficiency of bureaucrats and central planners imposing ideological decisions upon issues of allocation and distribution and, simultaneously, upon individual liberty and democracy. This, moreover, is why the standards of living in societies that do not practice free-market principles are invariably lower than those that do and why, in Hayek’s terms, collectivism, central planning, and interventionism are important features on The Road to Serfdom (1944) rather than democracy.
Integral to this perspective, then, is an insistence upon the marketplace as the only site in which the essential capacity for economic calculation might flourish, and in which the self-interest of competitive individuals might produce both a natural economic equilibrium and an equivalent social and political equilibrium, based on the differing entrepreneurial capacity and effort of individuals confronted with the profit imperative. The very limited notion of (market) democracy that underlies neoliberalism is perhaps best appreciated in terms of the “sovereignty of the consumer” theme, which one finds in Austrian-school debates on the correct balance between supply and demand and wages and prices in an efficiently functioning capitalist society.
Here, one encounters an image of the ultimate “consumer democracy” in which supply-side capitalism responds to the demand preferences of rationally acting individuals driven by the profit imperative. In this context “Consumers determine precisely what should be produced, in what quality, and in what quantities,” and modern individuals
are merciless egoistic bosses, full of whims and fancies, changeable and unpredictable. For them nothing counts other than their own satisfaction. . . . In their capacity as buyers and consumers they are hard-hearted and callous, without consideration for other people. . . . Capitalists . . . can only preserve and increase their wealth by filling best the orders of the consumers. . . . In the conduct of their business affairs they must be unfeeling and stony-hearted because the consumers, their bosses, are themselves unfeeling and stony-hearted.6
There is arguably no better statement in the neoliberal literature of a view intrinsic to it, that those living in market-based societies should not expect the kind of social justice or equity in the marketplace that socialists and liberal progressives demand. The argument instead is that this should not be expected of market-based societies. Instead, the capitalist marketplace—as the preeminent rationalized articulation of the modern human condition—is designed to allow the most entrepreneurially astute individuals to successfully achieve security, prosperity, and profit, while those less capable in this context fall behind and must take responsibility on themselves to improve their condition. Markets thus naturally produce “winners” and “losers,” and while government might have a minimalist role in allaying the worst implications of this natural process (e.g., social and ideological volatility), its primary role (apart from its responsibilities on national security) is to facilitate the efficient functioning of a market democracy.
This neoliberal characterization of the rationality of the market is not necessarily a reiteration of the “unfeeling and stony-hearted” nature of capitalism invoked above. It is infused with elements of the classical liberal narrative, derived from a linear reading of modern (post–seventeenth century) Western history, in which market capitalism, despite its selfish individualistic inclinations, produces open societies committed to social and economic freedom and democratic politics. Where neoliberals tend to diverge from their traditional liberal counterparts is in their harder-line adherence to market purity and their extreme skepticism regarding “mixed economies.” Indeed, as the attacks increased upon the Keynesian era and “embedded liberalism” in the late 1970s, neoliberals insisted that interventionist and regulatory systems, per se, are, at best, idealistic distortions of liberal economic theory and practice and are bound to fail (as in the stagflation era of the 1970s) or, at worst, are authoritarian and totalitarian exercises in social engineering, designed to destroy the right to choose and impose collectivist ideologies, as in the Soviet Union.
For most of the Keynesian Wirtschaftswunder (economic miracle) period of rapid and sustained growth in Western societies (1945–1973), this neoliberal perspective was considered an exaggerated and rather archaic polemic and, within university-based economic communities, as the ranting of a heretic fringe unable to cope with its marginalized status. But from the mid-1970s on, as governments and analysts desperately sought answers to the questions raised by stagflation, a major shift in economic theory and practice became evident. Indicative of this shift were the presentations of the Nobel Prize in economics to Hayek in 1974 and then to Friedman (1976) and the growing influences of neoliberal approaches to government-market relations and to public policy and governance more generally.
By this time, with Friedman as its most prominent advocate, a neoliberal “monetarist” approach emerged that represented the ideas of von Mises and Hayek, and others, in contemporary terms, insisting that the seeming complexity of the historical moment had a very simple solution—the repudiation of the mixed economy and a return to market forces as the basis of the modern good society. After three decades of government interventionism, neoliberals argued, governments must get out of the marketplace in order that ailing economies might be resuscitated and a crucial entrepreneurial spirit rekindled within struggling and confused societies. Control of the money supply rather than government-induced initiatives to provide full employment must become the principal goal of budgetary policy and market competition the basis of a fair and democratic society.
In policy terms, the neoliberal mantra was again simple enough, established as it was upon three fundamental and universally applicable policy goals—the reprivatization of major sectors of the economy (e.g., transport, mining, telecommunications, manufacturing, health, and education) and of publicly owned companies and firms, the deregulation of the economic system and its key institutions (e.g., banks, industrial relations, stock market), and the general shifting of legislation and attitudes toward free-market capitalism at all levels of society. If these fundamental principles were put in place, if strict limits were imposed upon “unproductive capital” spending (e.g., on welfare programs), and, importantly, if the “distorting” power and influence of trade unions upon wages and prices were curtailed, it would be possible again, proposed neoliberals, to unshackle the genius of capitalism for the benefit of national and global communities.
A quite remarkable shift in intellectual and policy emphasis has since taken place, with many of those societies most closely associated with Keynesian mixed-economy ideas and practices (e.g., the UK and the United States) rapidly adopting the neoliberal mantra and its “radical” policy prescriptions. What was once hegemonic in economic and policy circles has been repudiated theoretically and discredited in practice. And what was only a few years before regarded as fringe-dwelling extremism has been installed at the center of the economic profession and the decision-making processes of the political class.
Since the 1980s, consequently, neoliberal theory and practice has become dominant in the global political economy. Actually, it’s more precise to say that the earliest articulation of neoliberal principles, in practice, was in Chile in 1973, when the CIA helped orchestrate the overthrow of a democratically elected president (Allende) in favor of a right-wing general (Pinochet) perceived, correctly, as far more amenable to the free-market doctrines of Friedman and the Chicago school. The antidemocratic underbelly of neoliberalism was evident elsewhere in Latin America too, in the often-brutal regimes in Brazil and Argentina in particular.
In the 1980s, however, the “formal” neoliberal surge was most evident at the core of the Anglosphere—in the UK under Margaret Thatcher (1979–1990) and the United States under Ronald Reagan (1980–1988). It dominated analytical and policy agendas, also, in Australia, New Zealand, and Canada. And during the 1980s, neoliberalism became hegemonic within the major institutions of the global political economy (e.g., IMF, World Bank), where Keynesian perspectives were discarded and the original Bretton Woods regulatory institutions became the most powerful sites of a globalized free-market agenda. This agenda became commonly known as the Washington Consensus, representing the neoliberal policy prescriptions for the reconstruction of economies in the developing world, emanating from the Washington-based IMF and World Bank and the U.S. Treasury Department. Aligned with the economic “radicalism” of Thatcherism and Reaganism and imbued, philosophically, with Hayekian and Chicago-school principles about the correct relations between states and markets, it sought to privatize, deregulate, and open to market competition, economies, societies, and cultures around the world.
Intrinsic to the Washington Consensus model of development, consequently, was an insistence on the need for fiscal discipline via significant cuts to public spending (e.g., welfare, health, education programs), tax reform (via cuts to personal and corporate tax—to stimulate entrepreneurialism), the deregulation of financial markets, floating and competitive exchange rates, the opening up of developing economies to foreign direct investment and multinational corporations, and the privatization (selling off) of government-owned industries. Following the implosion of the USSR and the end of the Cold War, this neoliberal agenda was at the core of the “shock therapy” programs of the 1990s, invoked as essential to the transition from socialist central planning to free-market capitalism, in Russia and elsewhere in Eastern Europe.
The rise to global hegemonic status of neoliberalism has not resulted in the demise of the state, as some of its more zealous advocates have claimed. In the advanced economies, in particular, governments remain the agency of last resort for a whole range of societal demands and, consistent with neoliberal thinking, the crucial agency of facilitation and protection for the efficient functioning of the free market. But since the 1980s, many of the most powerful national governments around the world have severely limited the scope and range of their direct involvement in the market, adhering to the neoliberal mantra on privatization, deregulation, and market forces. In the wake of the Keynesian interventionist hegemony, therefore, governments everywhere have also embraced this mantra, disposing of trillions of dollars of state-owned assets in the charge toward privatization and market competition.
Summarizing this phenomena as it took place in the 1980s and 1990s, Yergin and Stanislaw speak of the “greatest sale in the history of the world,” in which governments around the world began to privatize that which had been “public” property for so long—from steel plants to phone companies and electrical utilities to airlines and railroads. Moreover,
all around the globe, socialists are embracing capitalism, governments are selling off companies they had previously nationalized, . . . Marxism and state control are being jettisoned in favour of entrepreneurship; the number of stock markets are exploding and mutual fund managers have become celebrities.7
At one level, at least, this neoliberal world order has been successful. There has been a massive expansion of financial sectors around the world, financial markets have seen significant growth, particularly in the major states, and there has been an acceleration in the process of economic globalization, as more and more domestic economies have been integrated into a global-market system of “turbo-capitalism.” In this process, however, the financial growth lauded by neoliberals has largely occurred outside of “real” economies, in the world of electronic currency trading, hedge funds, and “derivatives.” In the 1980s, Susan Strange and others warned of the dangers of this, emphasizing the “casino capitalism” characteristics of a financial system in which billions of dollars are traded almost instantaneously and the capacity of investors and speculators to destabilize and effectively destroy economies and societies via financial contagion (e.g., in Asia, 1997–1998).8
In the wake of the global economic crisis of 2008, which saw investment banks and mortgage corporations succumbing to bankruptcy and stock markets in freefall, neoliberal capitalism in general, and the celebrity status of fund managers in particular, have undergone something of a reappraisal. Indeed, since the 1990s, there has been a range of critical reappraisals going on concerning neoliberalism and its market zealotry and a number of reconfigurations of the neoliberal mantra. Some have sought to modify and humanize it and ameliorate its social consequences (e.g., in Scandinavia, Australia, Canada, etc.); some have engaged it more pragmatically, integrating collectivist philosophies with individualistic ones to best promote capital accumulation and economic growth (e.g., Singapore, South Korea, and China, in particular).9 There are also more radical reappraisals now evident within the neoliberal world order, with some states and peoples seeking to confront and overturn its conceptual and structural influences (e.g., in Latin America; see chapter 3). In recent times, too, there has been a widespread critical response to the neoliberal age in its Anglo-American heartland, as the recent Occupy movements and continuing antipathy to neoliberal global institutions (IMF, World Bank, WTO) indicate (see chapter 6).
Neoliberalism in Practice: Implications for Democracy
Much of this antipathy has to do with the increasing levels of unemployment, inequality, social dislocation, and deep insecurity associated with neoliberalism since the 1980s. Thus, whatever growth there has been in the neoliberal era, it has gone overwhelmingly to the rich world. Indeed, the gap between the richest 10 percent of the world’s states and the poorest has increased by almost 50 percent over the past thirty years. In 2007, consequently, the richest 2 percent in the world owned more than 50 percent of the world’s wealth, while 50 percent of the world’s people owned less than 1 percent.10 Moreover, during the period of neoliberal dominance, there has been an extraordinary concentration of wealth and power in a diverse range of states and regions around the world, from the small, mega-rich oligarchy in Russia that emerged following the neoliberal “shock therapy” of the early 1990s to the incredibly wealthy minority in China who have gained much from the “neoliberalism with Chinese characteristics” evident since the 1980s to the rise of fantastically rich entrepreneurs in Latin America and other areas of the developing world that characterized the neoliberal surges of the 1980s and 1990s.
This is not only a trend evident in developing societies. Within the major neoliberal states, the gap between rich and poor has also increased significantly under neoliberalism. There have been some winners, in the financial sector, within the corporate CEO community, and among educated minorities capable of taking advantage of the new service industries, in particular. However, income inequality in the OECD, for example, has increased in seventeen of the twenty-two states (1985–2008), where the average income of the richest 10 percent is nine times higher than the bottom 10 percent.11 These gaps are even starker at the Anglo-American core of the neoliberal world order. In the UK, for example, the top 10 percent of the population is now one hundred times richer than the poorest 10 percent.12 In broader social-justice terms, it’s worth recording that approximately 10 percent of UK citizens were designated as living in poverty in the pre-Thatcher era. But following the Thatcher neoliberal regime, in 1999, 25 percent of Britons were living below the poverty line, and 33 percent of children were in this category.13
The result of all this is that British political culture, as well as its economy, underwent significant reconfiguration under the first wave of neoliberalism in the 1980s. The political environment shifted to the right, the unions were “tamed” following the brutal conflict with the coal miners in 1984, belligerent nationalism again became a vote winner (after the Falklands War), and while Britain as a whole arguably became more affluent, in financial terms, it now had an underclass of Dickensian proportions. The ideological point, summarized by Andrew Gamble, is that “poverty, unemployment and disadvantage are no longer conditions demanding remedy through government programs,” even at the core of the democratic world. The ultimate legacy of the neoliberal reconfiguration, suggests Gamble, has been a rejection of the British social democratic tradition and an acceptance that social and economic inequality is now “welcomed and praised, and promoted through fiscal policy.”14
The Blair and Brown Labor/neoliberal governments sought to ameliorate this situation, with only moderate success, and even in the wake of the financial crash of 2008 and the devastating exposure of market logics and attitudes entailed within it, nothing seems likely to change. On the contrary, the current Cameron government has introduced a hard-line austerity plan for Britain’s future, including further cuts to welfare provisions and social-security benefits for the poorest. The social implications of all this were apparent enough in the Tottenham riots in 2012, and in the various Occupy protests around the UK in 2013, where a sense of alienation and anger at the system was palpable.
In the United States, the scenario is even starker. Between 1947 and 1979 (during the Keynesian era), the income of the bottom 20 percent of American workers rose by 122 percent as U.S. productivity rose by 119 percent. Since 1979, however, in the age of neoliberalism, U.S. productivity has risen by 80 percent, while the income of the bottom 20 percent of American society has fallen by 4 percent. But, most significantly in this period, the income of the top 1 percent has risen by 270 percent.15 The salary gap between workers and corporate CEOs in the United States (from a ratio of 30 to 1 in 1970 to 500 to 1 in 2000) starkly illustrates the growing gap between winners and losers in the neoliberal system and the phenomenal rewards going to the small minority of winners in this system.16
The more general scenario is one in which neoliberalism has accelerated in the United States. The result has been “substantial levels of social exclusion, including high levels of income inequality, high relative and absolute poverty rates, poor and unequal educational outcomes, poor health outcomes, and high rates of crime and incarceration.”17 Comparing the United States with other neoliberal societies in 2012, Timothy Noah finds that
Among the industrial democracies where income inequality is increasing, it’s much worse in the United States than it is almost anywhere else. Among 34 nations recently surveyed by the OECD, the United States got beat only by Turkey, Mexico, and Chile. That’s as measured by the Gini coefficient, and including taxes and government transfer payments.18
Summarizing this directly in regard to U.S. democracy, Lakoff and Smith argue that, in the neoliberal era, democracy has increasingly come to mean that “nobody should care about anybody else, or take responsibility for anyone else.” This, they argue, is a real threat to everything that American democracy is said to stand for and to the public goods and services that all citizens can democratically share. The results could be catastrophic for U.S. quality of social life, with “public roads and bridges: gone. Public schools: gone. Publicly funded police and firemen: gone. Safe food, air, and water: gone. Public health: gone.” Under the unregulated free market and a “winner take all” mentality, the American dream is thus becoming a nightmare for increasing numbers of Americans.19
And yet neoliberal advocates and commentators, many from the United States, continue to represent its theory and practice as the basis of “real” democracy, indeed necessarily so. As Mandelbaum puts it, “The remarkable success of democracy, particularly in the last quarter of the twentieth century, is due to free market economics.” Free-market capitalism, he argues, is the keystone of any genuine democracy, and the potential for justice, liberty, and freedom in democracies can only really be fulfilled within a free-market environment. Likewise, the desire for egalitarianism and social justice are only genuinely possible within liberal societies infused with modernist rationality and capitalist logics and attitudes. Thus:
Genuine democracy, and in particular liberty, requires supporting [market] institutions. These cannot function properly unless the people operating them have the necessary skills and habits, which are underpinned by a particular set of [liberal-capitalist] values.20
And as a neoliberal cheerleader such as Thomas Friedman has made clear, neoliberal globalization necessarily speaks with an American accent. This is because in the globalized neoliberal narrative, the United States is the ultimate success story, in its casting off of stifling old-world tradition and imperialism and in its embracing of individualism, political freedom, and market forces as a liberal-capitalist superpower. Recent events (e.g., the 2008 global financial crisis) have seen even Friedman speaking in more muted terms about capitalist globalism, but his enthusiasm in The Lexus and the Olive Tree (1999) continues to infuse orthodox U.S. perspectives on the neoliberal global order. Friedman is aware that a perceived triumphalism concerning the relationship between the United States and globalization has raised the ire of many around the world. But, as he puts it, they should either “get on or get out of the way” as American capitalism leads a historical surge in global affairs analogous to the rise of the United States to the apex of geopolitical and social modernity. In typically pithy style, he announces, “We [the United States] want ‘enlargement’ of both our values and our Pizza Huts. We want the world to follow our lead and become democratic [and] capitalistic.”21
As indicated above, Friedman’s proselytizing on behalf of American capitalism and democracy is, at best, highly problematic if one ponders critically the fate of millions of ordinary Americans under neoliberalism since the 1980s. But it is important to note that while the neoliberal world order might well speak with an American accent, the global success story of neoliberalism is not totally encompassed within the American telling of it. Indeed, even where the Western developmental narrative has no historical or cultural purchase (e.g., post-Soviet Russia, China) the central premises of the neoliberal story are, nevertheless, represented as crucial to future global growth, prosperity, and “democracy.”
Thus, while the United States has been the major beneficiary of it, the neoliberal world order cannot be reduced to the interests of a single state per se (however powerful), or a single elite or ruling class. A more precise comprehension of the winners in the neoliberal context would focus on a transnational or global elite who, in their various spaces and places, are able to take advantage of the social and political conditions intrinsic to a neoliberal democracy. The neoliberal variation on the Western democratic narrative is thus useful not only to U.S. ideologues invoking the “manifest destiny” theme as its rationale for global leadership but also to any number of ruling regimes in the Middle East, Asia, Africa, and Eastern Europe who can easily and successfully manipulate the free-market promises of neoliberalism to their own (antidemocratic) advantage (see chapter 4).
In this context, a major neoliberal tension becomes apparent on the question of democracy. It is that neoliberalism, in practice, is much less committed to the classical democratic narrative than it is in theory. Indeed, in practice, neoliberalism functions most effectively within a particular kind of “managed” democratic structure, while remaining inherently suspicious of and opposed to democratic perspectives that allow for the kind of participatory political behavior by the “majority” associated with the classical democratic ideal. Instead, neoliberals
tend to favour governance by experts and elites. A strong preference exists for governments by executive order and by judicial decision rather than democratic and parliamentary decision making [and] neoliberals prefer to insulate key institutions, such as the central bank, from democratic pressures.22
This managed democracy project is perhaps best understood as polyarchy.
Neoliberal Democracy as Polyarchy
Put simply, polyarchy refers to a system in which a small group actually rules, and mass participation in decision making is confined to leadership choice in elections managed by competing elites.23 It is, in this sense, rule by an elite with “democratic” characteristics, in which democratic participation is limited to the electoral process and the simple act of choosing between elites every few years.24 More significantly, the polyarchic notion of democracy does not acknowledge the significance of economic equality as integral to democracy. Unlike the “popular” notion of democracy, then, which proposes that political, economic, and ethical outcomes are crucial to a democratic system, the polyarchic approach is concerned only with political and institutional process. It insists that “issues of so-called economic and social democracy be separated from the question of governmental structure.” Thus, “economics” (and economic inequality) is theoretically insulated from the “political” (and political critique), and for figures such as Seymour Martin Lipset and others, this notion of democracy refers to “a political system, separate and apart from the economic and social system.”25
The significance of this radically reduced notion of democracy is clear enough, in that “there is no contradiction between a democratic process and a social order punctuated by sharp social inequalities.”26 Consequently, with its concentration solely on electoral contestation between political elites, the polyarchic definition of democracy deemphasizes the questions of social and economic inequality intrinsic to democracy’s classical and early-modern articulations and suggests, instead, that the minority monopolization of wealth and power is in fact consistent with democracy—as long as there are “free and fair elections” at regular intervals.
The logic underlying this perspective derives from Joseph Schumpeter’s Capitalism, Socialism and Democracy (1942). Schumpeter is particularly interesting in the present context because a half century before figures such as Friedman and Mandelbaum were projecting the irreducible connection between democracy and capitalism as the key to the good modern (neoliberal) society, he was invoking the same connection for (broadly) the same political and intellectual purpose. “History clearly confirms,” writes Schumpeter, that “modern democracy is a product of the capitalist process.”27 More precisely, Schumpeter makes clear that the historical narrative of Western development remains intrinsic to the question of democracy. At the core of this narrative, Schumpeter places a particular sector of modern capitalist society—the aspirational bourgeoisie, who from the seventeenth century on sought freedom from traditional constraints in civil society and upon the free market but who remained wary of more radical challenges to the status quo. Thus, in any era, capitalist markets, an entrepreneurial middle class, and educated, conservative elites are the crucial components of an ordered, stable capitalist democracy, one characterized by civic and political freedoms, periodic elections, and constitutional government.
Beyond this is delusion and anarchy, delusion on the part of those who perceive the uneducated, politically disengaged working masses as capable of democratic responsibilities and obligations, and anarchy resulting from the agitation of radical democrats for the “rule of the majority.” Accordingly, popular forms of democracy are neither possible nor desirable within an advanced liberal-capitalist world order. Indeed, in practice, and so that the capitalist market has the social and political order it requires to function effectively, the democratic participation of the masses is best reduced to regular elections, an institutional gesture (albeit a public and celebrated one) that helps decide which, among competing elites, gets to rule.
Schumpeter’s view was popularized and developed by Robert Dahl in his Polyarchy (1972), which followed up his more explicit Schumpeterian viewpoint in A Preface to Democratic Theory (1956), where he argued that increased political participation by the masses should not be encouraged in contemporary liberal-capitalist societies. In particular, he suggests, increased political participation by those in the “lower” socioeconomic classes could destabilize the stable pluralism of U.S. democracy.28 This sense of anxiety about the threat to order from the “uncontrollable” masses is, of course, a theme inherent to the contestation over democracy since its beginning in ancient Greece. In the 1950s and 1960s, it saw a range of scholars protesting that Dahl and his supporters were effectively promoting an old and deeply embedded antidemocratic elite theory in the guise of modern liberal pluralism.29 More recently, French political philosopher and democratic theorist Jacques Rancière has argued that this “hatred of democracy” has become central to neoliberal politics at the end of the twentieth and beginning of the twenty-first centuries.30
Particularly important in this era has been Samuel Huntington, who has consistently advocated the polyarchy position, primarily regarding events in the Third World / global South, where demands for change to the status quo have often resonated with a radical democratic ethos. In the 1960s, for example, Huntington was warning of the perils of the liberal modernization-theory perspective on social progress and, in particular, the proposition that capitalist development will create politically stable democracies around the world. This is not the case, argues Huntington, insisting instead that democratic freedom must be managed if it is not to trigger social and political instability.
For Huntington, the equation is simple—elites must rule if there is to be social stability in any society. The consequences of mass rule are most dire on the global periphery, he argues, where they jeopardize the crucial economic and geostrategic interests of the United States and its Western allies. Any challenge to this rule on behalf of popular democracy, therefore, must be eliminated or managed—by military force if necessary—if Western access to raw materials and markets is to be assured and a stable environment for investment and business is to prevail. Democratic outcomes must therefore be of a minimalist kind and configured so as to serve the local and global status quo.31 In the 1970s, Huntington’s anxieties about “too much democracy” were again on display in his contribution to the Trilateral Commission’s The Crisis of Democracy (1976). And this view is expressed in more explicitly polyarchic terms in his 1991 book on the “third wave” of democratic agitation in Latin America, Asia, and Africa, where he endorses, at best, a “minimalist-procedural” form of democracy designed to take the edge off radical demands for change while leaving the socioeconomic status quo intact.32
There is little explicit attention paid to economics in the literature on polyarchic democracy. The latter is, after all, considered an exclusively “political” phenomenon. But in the work of Schumpeter, Dahl, and Huntington, and others, a taken-for-granted market logic underpins and directs their musings on the democratic process. At the core of their central “procedural” definition, for example, is a free-market thematic that assumes all voters to be engaged in an electoral marketplace in which the best candidate will receive most votes. In this sense,
citizens have “freedom of choice,” they can select the candidate who will govern them. This is an economic model for a supposedly democratic process. Voters can be compared to consumers involved in selecting the “product” of their choice. They do not act like citizens who participate in the polity.33
This is the severely limited model of polyarchic democracy advocated by Schumpeter, Dahl, and Huntington in the liberal-capitalist world. For Huntington, it is the only practical option for the global system also, if the U.S. and Western political culture is to remain dominant into the twenty-first century. In this regard, the archconservative Huntington sounds remarkably like the arch-neoliberal (Thomas) Friedman when he extols the virtues of an “American creed” as the foundations for a civilized and stable world order, a creed that takes for granted the civilizing role of free-market capitalism as much as it takes for granted the “tyranny of the mob” as the insurmountable problem of participatory democracy.34
It is in this regard that the theory and practice of polyarchy intersects most explicitly with the current debates over neoliberal democracy touched on above, because, as David Harvey suggests, for neoliberals,
governance by majority rule is seen as a potential threat to individual rights and constitutional liberties. [Consequently] democracy is viewed as a luxury, only possible under conditions of relative affluence coupled with a strong middle class presence to guarantee political stability.35
This critique of polyarchic democracy has been updated and developed in a provocative way by Sheldon Wolin in Democracy Inc. (2008), to which we now turn. Recognizing polyarchic democracy not as a foundational given of the good society in a globalizing world, Wolin describes how it has actually helped to produce a “managed” democracy of the polyarchic kind that has flourished in the neoliberal era as the democratic majority in the United States has become increasingly passive and disengaged politically, with significant consequences for democracy throughout the world.36
Neoliberalism and “Managed” Democracy in the United States: A Case of “Inverted Totalitarianism”?
Wolin’s views on the nature of U.S. democracy are consistent in many ways with those of Schumpeter in the 1940s and Dahl in the 1950s, in that Wolin, too, points to an elite manipulation of power as the defining characteristic of the U.S. political system.37 Wolin, however, is much less sanguine about this in Democracy Inc., which emphasizes the crucial role played by neoliberal corporate actors and ideas in the resulting “managed” democracy. The implications of this for the American people and for U.S. society are stark, in a system in which antidemocratic elements have become increasingly systemic and neoliberal corporatism has become increasingly powerful. The results in the twenty-first century are everywhere to be seen
in widening income disparities and class distinctions, polarized educational systems (elite institutions with billion dollar endowments versus struggling public schools and universities), health care denied to millions, national political institutions controlled by wealth and corporate power.38
This, for Wolin, and critics of neoliberalism in general, is entirely predictable. A neoliberal democracy, it is argued, governs for a small minority and is much less concerned about the fate of those outside of this privileged category. For Wolin, the particular polyarchic structure evident in the contemporary United States is imbued with the desire of wealthy and powerful minorities to wrench back power, privilege, and prosperity in the wake of New Deal egalitarianism, the political and cultural dissent of the 1960s, and crises in American capitalism and foreign policy since the 1970s. This is a project that is flourishing in the neoliberal era.
The nature of this struggle for American democracy, he argues, can be analogized to the struggles over “enclosure” in sixteenth-century En-gland at the dawn of capitalist modernity. This struggle ensued over the “commons”—those areas of arable land designated during the medieval period as “open” or public land in order that peasant people could use it for food production. As the modern era emerged, however, rich landowners increasingly blocked off the open land with hedges as a means of “privatizing” it and excluding the poor from it. This action, Wolin suggests, is indeed analogous to the attempts of the contemporary rich within the United States, and elsewhere in the neoliberal era, to reverse gains made regarding the “political commons” of the modern era—democratic gains—concerning open and public access to education, health care, and welfare provisions in particular. The major consequence of this for U.S. society, he proposes, is a system of “inverted totalitarianism” at the twenty-first-century core of ostensibly the most prominent democracy in the modern world.
Wolin is at pains to differentiate between classical totalitarian systems, associated with Nazi Germany and the USSR, and life in contemporary America that, he suggests, has inverted a number of totalitarian themes as part of its elite management of democracy. Thus, whereas real totalitarianisms sought to mobilize the masses as a vanguard of often violent and destructive political change, the American inverted variant thrives on the passivity, conservatism, and political demobilization of its citizens. Similarly, while totalitarian regimes were often partly socialist in their orientations and strategies (which helped them control and manipulate the masses), the U.S. inverted system is committed to corporate capitalism and is largely indifferent to the plight of the masses. And whereas, in classical totalitarianism, there was a distinct connection between its theory (i.e., fascism) and practice (i.e., a military culture and expansionism), American inverted totalitarianism speaks in terms of liberal humanism and benign democracy—but it acts in often ruthless power-politics terms—to maintain and expand its global status, either through its market power or via its overwhelming military presence on the global stage.
This “inverted totalitarianism” is operationalized throughout the everyday workings of a managed democracy, in which a government and public-service sector, ostensibly committed to the welfare of the American people, actually operates as a top-down system of elite control wedded to the ideology and logics of a business corporation. Moreover, instead of a commitment to a democratic politics of accountability and social justice, the dominant ideology and logic in twenty-first-century America is that of the capitalist manager and the corporate administrator. And while, at face value, the democratic structures of American society remain firmly in place and the democratic rituals (e.g., elections) are regularly and extravagantly observed, the content of this democracy is depreciated by the power of an increasingly wealthy minority, by rich lobbying interests, and by a corporate media that trivializes and demeans the political process and democratic culture in general. Similarly, instead of focusing its massive resources and energy on the welfare of its people, in regard to health and education and basic infrastructure, successive American democratic governments spend trillions of dollars on planning for, fighting, and recovering from interventionist wars around the world.
In Wolin’s view, this systemic scenario developed into its present form after World War II, and it became entrenched in the (post-1970s) era of neoliberalism, particularly in the period between the Reagan and G. W. Bush administrations. In this context, the Democratic Party in power has proved no real alternative, committed as it also is to neoliberal principles and the corporate management of the democratic system. Genuine change, Wolin argues, would require the development of a “popular” democratic culture, which is highly unlikely in a U.S. context where a classical democratic consciousness has never been as deeply embedded as in other regions of the world. Not surprisingly, argues Wolin, this has considerably slowed down democratic advances for those seeking change to the system (e.g., black Americans, women, and trade unions), and it has significantly alienated and pacified millions of Americans in their relationships with the system.
Neoliberalism, per se, did not really emerge until the early 1980s in the United States, during the Reagan era, in particular, as Keynesian corporatism, centered on the compromise between capital, the state, and labor, unraveled, and monetarist perspectives were utilized (somewhat inconsistently) at the base of “Reaganomics” and as part of the reassertion of American global power after Vietnam. But, as Wolin argues, during the 1950s and 1960s, the shift from a Keynesian culture back to a laissez-faire mind-set was already emerging, in the rise of a managerial class that was to transform American business and the social and political landscape as the neoliberal world order developed.
This was the “Mad Men” phenomenon in actuality, a revolution in American capitalism that saw a new breed of corporate managers emerging from business and law schools, imbued with a passion for competition, for high-risk business strategies, and profit-directed management. This became an issue of even greater significance when the business model of the “Mad Men” was transposed upon many other areas of society, including the media and cultural institutions and the education sector through university administrations. The new managerialism in education was thus exemplified when the “president trained at the Harvard business school succeeded the Rhodes scholar president” in U.S. universities.39
Just as importantly, the shift from Keynesianism to neoliberalism was advanced by major shifts in the political and ideological realms as a new American conservatism (a neoconservatism) emerged and reconfigured its traditional principles to embrace the free market as the site of Western freedom, liberty, and democracy. Integral to this shift were liberal intellectuals who in the early Cold War years had shifted to the right in line with the zealous anticommunism of the time. During the Vietnam War and the culture wars of the 1960s and 1970s, a further shift took place—away from the liberal mainstream and its perceived association with leftist radicalism and social democracy and toward the Republican Party, now increasingly stimulated by its neoconservative sector.
By the time that Reagan came to power in 1980, a shaky but nevertheless powerful amalgamation of forces was evident that saw the concern for traditional “values” (religion, patriotism, Western cultural pride) combined with a commitment to the free market and to the neoliberal managerialist revolution. For Wolin, “the revelatory moment came [in the 1990s] when the neo-cons joined with the neoliberal managerialists to proclaim the ‘New American Century’ and lay plans for the expansion of American power.”40 This was crucially significant because “imperial politics represents the conquest of domestic politics and the latter’s conversion into a crucial element of inverted totalitarianism.” More precisely, and in relation to the fate of contemporary democratic politics, “it makes no sense to ask how the democratic citizen could ‘participate’ substantively in imperial politics.”41
By the early twenty-first century, with George W. Bush in the White House and neoconservative influences resonant within the business and foreign-policy communities, an increasingly narrow conception of democracy thus came to dominate in the United States, as its central classical terminology of liberty, equality, freedom, and social justice was either ridiculed as “utopian,” imbued with a narrow economistic meaning, and/or used as a rhetoric of war and “regime change.” In such a cultural environment, an inverted totalitarianism and contemporary polyarchy have become increasingly evident.42
All this, Wolin contends, has led to the current contempt for democracy in which governments routinely and systematically lie to their citizens. Lying, Wolin acknowledges, has always been part of government, but it has a particular salience in democracies, which require a “political culture that values and supports the honest efforts to reach judgments aimed at promoting as far as possible the best interests of the whole society.” This is not the case in the age of polyarchic managed democracy, he proposes, where corporate interests prevail and where U.S. governments have become increasingly reliant on deceit to legitimate the ongoing global pursuit of geopolitical and economic hegemony. In this context, “democracy becomes dangerously empty” and increasingly receptive to appeals to “blind patriotism, fear and demagoguery.”43
The Iraq War and the deceit of the G. W. Bush administration resonate powerfully here, of course, and a number of critics of neoliberal democracy have, in one way or another, invoked this episode as emblematic of its problems and dangers. Some have done so as part of critical engagement with the “democracy promotion” and/or “low intensity” strategy central to U.S. foreign policy since the Reagan era of the 1980s and intrinsic to the war-on-terrorism project of the Bush administration after September 11, 2001.44
Neoliberalism and the U.S. Promotion of Global Polyarchy
In the 1980s, the democracy promotion theme was an intrinsic part of the anti-communist crusade undertaken by Ronald Reagan, particularly in the Third World where the United States sought to counter Soviet influence. It emanated, primarily, from the acknowledgment that supporting capitalist authoritarianism in Latin America, and elsewhere, was creating more problems than it was solving and that there was a popular and perhaps uncontrollable backlash under way by the 1980s. Consequently, and as the tide turned against once-favored oligarchs and their military backers, a reformulated democratic doctrine was constructed in U.S. foreign-policy circles.
At the core of the new democracy-promotion strategy was the invocation of polyarchy as the political mechanism by which radical indigenous forces might be controlled and the drive for social change directed toward market liberalism under the guidance of U.S.-approved elites. This intent is summarized by Robinson in terms of a scenario in which
the demands, grievances and aspirations of the popular classes tend to become neutralized or redirected less through direct repression than through ideological mechanisms, political co-option and the limits employed by the global economy and the legitimate parameters of polyarchy.45
In practice, this has required support for formal democratic structures and a range of social, political, and economic programs designed to introduce, stabilize, and/or buttress the kind of democracy the United States and its neoliberal allies favor around the world—a “low-intensity” democracy for a high-intensity era of globalization. And because it is interested primarily in ideological persuasion, rather than old-fashioned state/military coercion, it has meant more subtle methods of gaining mass support in civil society. Accordingly, much of this interventionism has been aimed at influential groups such as trade unions, the media, women’s groups, and political parties, rather than the state apparatus per se.
In the 1980s, institutions such as the State Department’s Center for Democratic Governance and the National Endowment for Democracy (NED) under the guidance of the neoconservative Carl Gershwin, began the task of encouraging support for the new “consensus” model of neoliberal democracy. Between 1985 and 1995, another dozen new agencies were created with the specific task of promoting this particular brand of democracy. At least two main categories of state were recognized as crucial for democratic support. The first concerned programs designed to consolidate and stabilize already existing polyarchal-type regimes. In the 1990s, this included most Latin American countries under conservative civilian governments (e.g., Cristiani and Arena in El Salvador, Chamorro and Uno in Nicaragua, Callejas in Honduras, Calderon in Costa Rica, and Serrano in Guatemala) and the ex–Soviet bloc states where oligarchs and elites ruled but where the trappings of democracy (e.g., regular elections) represented a real sense of polyarchal progress. The task here was to bolster elite forces in political and civil society and further “promote” the benefits of a neoliberal economy, locally and globally.
The second major category concerned those societies regarded as in “transition to democracy,” either from right-wing dictatorships to elitist civilian rule or from left-wing, socialist, or nationalist regimes to similarly structured polyarchies (e.g., in the 1980s/1990s, the Philippines, Chile, Nicaragua, and Haiti). The immediate task here was to gain influence over the major transition groups and direct their struggles in ways that preempted their radical dimensions and shaped their success toward U.S. geopolitical interests and neoliberal globalization.
The early template of success was the overthrow of the Marcos regime in the Philippines in 1985. Previously, the United States and its Western democratic allies had given Marcos unqualified support as the Philippines became a haven for transnational corporate capital in the 1970s, and, initially at least, they maintained this support when the regime cracked down on leftist forces in the early 1980s.46 But when the brutality of the regime and the “crony capitalism” of the ruling family saw an alternative, elite-led challenge to the status quo, the U.S. moved to promote its new democratic strategy in favor of the anti-Marcos forces. The more specific task then became one of controlling the popular uprising against Marcos (via a military revolt directed by U.S. advisors and diplomats) and actively supporting the Aquino-led elite into “democratic” office. Importantly, too, the new government immediately launched a major program of neoliberal restructuring under the guidance of the NED and USAID. This paid (literal and political) dividends for those in the business and political elite, ensuring support for the new polyarchic system.47
In this period, and since, there have been mixed results for the “low-intensity” approach to democratic politics in the global periphery. This has been particularly so in Chile, where, by the mid-1980s, a popular movement arose against the brutality of the Pinochet regime, and the United States effectively changed sides and began (via NED and USAID) to channel aid and political support to a (mainly) civilian elite committed to the continuation of neoliberal principles and practices. In 1989, an acceptable center-left “coalition of parties for democracy” (the Concertación) took power and maintained it until 2010, when the neoliberal Sebastián Piñera, at the head of a center-right grouping, became president.
In places such as Nicaragua and Haiti, the promotion of polyarchal democracy was a more complex issue. Years of U.S. support for the brutal Somoza regime in Nicaragua could not prevent the coming to power of the leftist Sandinistas (1979), and the U.S.-directed counterrevolutionary strategy under Reagan was unable to change this situation sufficiently by coercive means. It was not until the United States changed the strategic mix (around 1987), increasing the consensual elements and pouring more money (including major bribery projects) into a conservative political elite headed by Violeta Chamorro, that success was achieved in the early 1990s, in what were described as “transparent and democratic” elections.48 To underscore the volatility of this situation, however, history has effectively repeated itself, with the Sandinistas under Daniel Ortega regaining power in the elections of 2006.
In Haiti, years of political violence and social turmoil during the 1980s and 1990s saw different elite groups vying for power, with the United States seeking to organize and maintain a polyarchal structure of its choice. It supported the conservative Marc Bazin against the liberation theologian Bertrand Aristide in 1990 but couldn’t prevent a “leftist” victory in the elections of that year in which Aristide gained 67 percent of the vote. The United States was then implicated (via the CIA) in the military coup that overthrew Aristide only a year later.49 But in 1994, with Bill Clinton in power (1992–2000), the United States changed its allegiance again, with Clinton intervening in a chaotic Haiti, via Operation Uphold Freedom, to help reinstall Aristide, albeit now in a more tightly controlled and neoliberal-oriented polyarchy. Once again, in terms of a volatile history repeating itself, Aristide was ousted in a coup in 2004, which he alleged had been orchestrated by the United States.
Democracy promotion then has been an integral dimension of U.S. attempts to maintain its hegemonic status in the wake of the Vietnam War, in particular, and while it has not always been as successful as it might have wished, its campaign to install polyarchic democracies remains essential to its leadership of the neoliberal world order. Bill Clinton was an enthusiastic advocate of this particular kind of global democracy in the space after the Cold War. A 1993 speech by Clinton’s then deputy national security advisor, Anthony Lake, made clear the central role of democracy promotion in U.S. foreign policy in the post–Cold War era.50 Above all, stressed Lake, the era of Cold War containment should now give way to a strategy of enlargement—the “enlargement of the world’s free community of market democracies.” Three ambitions characterized the Clinton globalized perspective in this regard: the first, to “increase our prosperity”; the second, to “update our security arrangements”; and the third, to “promote democracy abroad.”
The three were inexorably interwoven, explained Lake, because “the expansion of market-based economics abroad helps expand our exports and create American jobs.” Moreover, “the addition of new democracies makes us more secure because democracies tend not to wage war on each other or sponsor terrorism.” Developing this theme further, Lake outlined the principles by which this promotion of market democracy should take place, keeping in mind that “democracy and market economics are not everywhere triumphant.” In this regard, it was crucial that the United States “should help foster and consolidate new democracies and market economies, where possible, especially in states of special significance and opportunity . . . [and] must counter the aggression—and support the liberalization—of states hostile to democracy and markets.”
The question of how market democracy should be promoted in areas where hostility was evident is dealt with by Lake in interesting fashion because as well as giving new democracies “the fullest benefits of integration into foreign markets,” the United States, he contends, must utilize other means to enlargement “through an enlarged circle not only of government officials but also of private and non-governmental groups.” Private firms, he notes, “are natural allies” when it comes to strengthening market economies, and the United States has a “natural ally” in “labor unions, human rights groups, environmental advocates, chambers of commerce and election monitors” when it comes to democracy promotion in civil society. But, suggests Lake, just as defense relies on force multipliers to prevail in military struggles, so “we should welcome ‘diplomacy multipliers’ such as the National Endowment for Democracy” in the struggle with those opposed to neoliberal forms of democracy. By the mid-1990s, then, NED and its counterparts throughout the official and nonofficial ranks of “diplomacy multipliers” had become integral to U.S. foreign policy and its globalization strategies.51
It is the case also that, unlike the Reagan administration that preceded it and the G. W. Bush presidency that was to follow it, there was in the Clinton era some sensitivity toward diversity in the global order, at least to the extent that it acknowledged that “democracy and markets can come in many legitimate variants. Freedom has many faces.”52 Unacknowledged, however, is the notion that democracy might be possible without fealty to American-style capitalist markets, let alone the notion that the face of freedom might be hostile to a U.S.-led, neoliberal global order. Consequently, as Carothers has noted, while Clinton was in office, he massively increased the clandestine “diplomacy multiplier” effect of the democracy-promotion strategy, increasing funding from $100 million in 1990 to $700 million when Clinton left office in 2000, when the United States was engaged in “low-intensity” interventionism in around one hundred countries around the world.53
During the G. W. Bush era of the twenty-first century, the democracy-promotion strategy was further upgraded and made more explicit under the direct influence of neoconservatives in the Pentagon and White House. In particular, after 9/11, Bush invoked it as central to the “War on Terror,” proposing that “it is a policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.”54 In the same vein, Condoleezza Rice in 2005 reiterated that the U.S. “mission” under G. W. Bush was to “spread freedom and democracy throughout the world.”55 More precisely, she proposed, the interventions into Afghanistan and Iraq were consistent with “the United States want[ing] to be thought of as liberators,” dedicated to “the democratization or the march of freedom in the Muslim world.”56
The template for the Bush era, of course, was the Iraq War (2003–2011) in which the democracy-promotion theme became a major rationale for U.S. military intervention. The orthodox perspective on this issue is perhaps best represented in the proposition that
just as the eradication of malaria requires draining the swamps that harbour the mosquitoes that carry the disease, so abolishing or at least controlling terrorism, American officials reasoned, requires ending the conditions that breed terrorists. This meant replacing dictatorships with democracies.57
Not everyone is convinced by this particular attempt at mosquito eradication. Instead, what is represented in U.S. foreign-policy circles as a necessary strategy in the struggle to destroy terrorism and install democratic regimes is understood by many as an effective continuation of the Reagan policy—of utilizing democratic rhetoric for hegemonic purposes—albeit this time with the model of a fully blown neoliberal democracy at its core.
What this means in practice was evident enough in the attitudes and practices of the Bush administration as it sought to install a neoliberal democracy in Iraq in 2003. Consequently, in the days following the successful “shock and awe” campaign, the Iraq Coalition Provisional Authority headed by Paul Bremer announced its four priorities for the new democratic Iraq. The first, that all public enterprises were to be immediately privatized; the second, that trade barriers were to be eliminated; the third, that all Iraqi banks, firms, and businesses were to be opened to foreign competition; the fourth, that trade unions were to be banned and the right to strike outlawed for Iraqi workers.58
Iraqi members of the Coalition Provisional Authority protested (to no avail) that this was free-market fundamentalism, not democracy. Or, as David Harvey has put it, “the Iraqis were expected to ride their [democratic] horse of freedom straight into the corral of neoliberalism.”59 Democracy was, in this instance, what neoliberalism said it was, and the process of democracy was to be little more than polyarchy—the minimalist process by which the Iraqi people got to “choose” the (U.S.-sanctioned) elite that was to rule them, as Iraq was formally introduced to the neoliberal world order.
The Instability of Neoliberal Democracy
Since 2003, the “democracy” strategy in Iraq has gone tragically awry. This is partly, of course, due to the arrogance and sheer ignorance of a neoconservative-inspired “regime change” strategy, imposed by the Bush administration upon a complex and inherently volatile political and cultural environment. In this sense, it was always doomed to failure and tragedy, as many warned in 2003. But, the Iraq debacle aside, there is a deeper dimension to the failure of the U.S. democracy-promotion project in many areas of the world, and it has to do with the basic instability of the neoliberal global order as it seeks to represent itself as something it is not, particularly when its misrepresentation of its nature and motivation is couched in democratic terms. In this regard, as neoliberalism’s commitment to market forces and corporate profit inclines it toward statist and “crony capitalist” regimes that best serve its interests or, at best, toward a tightly managed polyarchy, it can become a powerful incitement to resistance for those genuinely seeking political freedom and social justice.
This, we suggest, is becoming increasingly evident at the periphery of the neoliberal global order, particularly in Latin America, where radical democratic perspectives have sporadically challenged the Western economic and geopolitical hegemony over many years. In more recent times, however, Latin America has become the site of concerted attempts to confront the dominant global order with alternatives to neoliberal globalization and its particular (polyarchic) variation on the democratic theme. In Venezuela, in particular, this challenge to neoliberalism has resulted in an increasingly influential reconfiguration of the dominant democratic model—as Bolivarian socialism—that explicitly privileges the poor majority and encourages greater and greater levels of social, economic, and political participation by those previously excluded from access to power and prosperity. It is to this, arguably the most radical challenge to neoliberal globalization, that we now turn.