Neoliberal Blues

By Crystal MurphyJune 24, 2019

Neoliberal Blues

Renovating Democracy by Nathan Gardels and Nicolas Berggruen

I CAN’T BE the only political scientist ranting about how Woodrow Wilson would be turning in his grave 101 years on from his 14 Points speech. No doubt the 28th president of the United States had his faults, as seen in the campus protests aspiring to remove his name and bust from college campuses because of his racist actions. But you would be hard-pressed to find someone in international relations or political economy that wouldn’t want to see his legacy at least partially preserved because of his foreign policy vision.

Wilson proposed the League of Nations (what became the United Nations) to observe and uphold peace agreements, and sought to promote international trade so as to create interdependence between nation-states. He reasoned that if our fates are bound up with each other’s economically, we are less likely to fight.

Nobody argues today that benefits of globalization have been evenly spread. But the modern nationalist corrective to Wilson — Donald Trump and his “America First” — is even worse.

The new book Renovating Democracy: Governing in the Age of Globalization and Digital Capitalism by Nathan Gardels and Nicolas Berggruen has a lofty title. The book is an effort to prescribe corrections in foreign policy and the failures of domestic democratic processes. The “perceived loss of control over one’s destiny” for the average citizen in a Wilsonian world is marked by the coronation of Trump and his populist counterparts elsewhere.

Gardels and Berggruen frame the “trials of the West” as a function of two dynamics: social media and something they call “digital capitalism.”

Thanks to platforms like Facebook and Twitter, “there is more participation than ever before,” but this engagement has come in the form of problematic information silos and propagated misinformation, which has fragmented “mass society into diverse tribes.” The splintered public goes on to make bad choices. To deal with the fake news bots and echo chambers, the authors essentially suggest that Mark Zuckerberg et al should work against their own profit motives. So as to create more accountability on media sharing platforms, these mechanisms might need to be regulated by a government.

“Digital capitalism” is a tad fresher. This is not an agreed-upon or even regularly used term, and I was eager to see how the authors operationalized it. I thought it might mean the digitization of finance, which is by far the largest share of the global economy and has proved crisis prone time and again. But the authors want us to focus on the rapidly growing gig economy elements of the tech industry: businesses like Uber, Lyft, and Airbnb. Advances in these domains are surely already disenfranchising millions of American workers.

The authors promise a vision to renovate democratic institutions and even out the tilting economy. No doubt we need an imaginative vision of the future, as in Antoine de Saint-Exupéry’s admonition that, “If you want to build a ship, don’t drum up people to collect wood […] but rather teach them to long for the endless immensity of the sea.” Gardels and Berggruen did not show us the sea, but instead a set of tame prescriptions.

The authors share James Madison’s “Federalist No. 10” (1787) concerns with direct democracy: the voting population is too susceptible to brute passion for its own good. The argument is the basis for representative democracy. The authors extend the “Founding Fathers” republican arguments to protect against the social-media-fueled “dumb mob” (a phrase used often). Is it even empirically true that people are dumber than they were in the late 18th century? Perhaps I have too rosy a view of the capacity of people to learn about their choices. Instead, the authors suggest new methods of replacing the power of citizens.

Gardels and Berggruen reckon with populism and special interests (wealthy advocates of referendum ballot measures) gaining too much voice by zooming in on California. “[N]ever has the need been greater for countervailing practices and institutions to establish facts, deliberate wise choices, mediate fair trade-offs, and forge consensus that can sustain long-term implementation of policies.” The authors propose a series of technical changes, like fewer constituents per representative and harnessing the internet for public feedback to government.

Their biggest dream of reining California’s unhinged direct democracy in is with a new Senate model that has appointed positions. They offer “city manager” municipal charters and the Canadian Parliament as examples. Never mind that they themselves note how Prime Minister Justin Trudeau is now going back to the public for feedback, as many of the Canadian appointees are viewed as patronage jobs.

Is the problem really “one person, one vote”? “Federalist No. 10” argues that the “first object of government” was to protect individuals’ rights to accrue property. And as Arthur MacEwan has noted, the Constitution of the United States was designed to limit threats to the propertied classes — to maintain factions who could not coalesce against the wealthy. Scholars as far back as Charles A. Beard in 1913 have suggested that the Constitution was drawn so as to protect the Founders’ own wealth.

The authors generally characterize the aspired Senate appointees as disinterested parties with expertise. But they want to link “ideas of direct democracy and delegation of authority to knowledgeable nonpartisan elites.” I stared at that word “elite” for a while. Readers might consider the appointments of Betsy DeVos, Andrew R. Wheeler, Wilbur Ross, and other institutional elites as they consider this handoff.

Digital capitalism “is divorcing productivity and wealth creation from employment and income,” they write, but these divorces were described as early as 1821 by the economist David Ricardo. Indeed, Karl Marx and Friedrich Engels quipped over 100 years ago that if productivity and wealth had gone hand in hand, capitalists “ought long ago to have gone to the dogs […] for those of its members who work, acquire nothing, and those who acquire anything, do not work.”

It is commendable that the authors seek to analyze what “knowledge-driven economy” technologies mean for the already deep chasm between the classes with ownership and those with little more than their labor power. This section of the book boasts the title “Redrawing the Social Contract” and is consistent with the Democratic Party ethos. They call for a more “robust” and “redefined safety net and opportunity web” to cope. The authors propose a “flexicurity” safety net for the disadvantaged. They also endorse universal basic income — an exciting prospect whose advocates span the political spectrum. Their twist is that it be funded “pre-distribution” rather than redistribution through taxes: essentially, a public share of equity in new firms.

The global section of Renovating Democracy: Governing in the Age of Globalization and Digital Capitalism focuses almost entirely on the future of United States–China relations because, as they write, when “populists rail against globalization that has undermined their standard of living through trade agreements, they mostly have China in mind.”

The authors had meetings with President Xi Jinping and other ranking Chinese officials. The chapter plays to arguments laid out earlier in the book regarding the need for continuity in governance, and seems to be an attempt to warm readers who wince at Chinese relations because of communism. Gardels and Berggruen were right that the American politician talking points about Chinese dumping and currency manipulation are overblown. But why pander to this obvious point?

Up to now, American-designed globalization — including trade and finance regimes — has overwhelmingly favored the United States, but the benefits go to those who own the firms instead of the citizens. No doubt, Trump’s foolish hardball risks a century’s work on international cooperation. Despite their flaws, these regimes are absolutely necessary. If anything, they need to be strengthened so that they can achieve the ethics they were created to promote. Befriending China in their story seems more about making sure the United States keeps a seat at the G20 table. But it can only do so much to redress the central problem.

The enduring question is how the disenfranchised — the proletariat and ever-growing “precariat” anywhere — can get what they need. Up to now, wealthy elites have driven the dislocation. Do the governance dreams described in Renovating Democracy challenge that power?

Nicolas Berggruen is the founder of the Berggruen Institute, to which Nathan Gardels is a senior advisor. Gardels is also the editor-in-chief of The WorldPost, a publication created by the Berggruen Institute in partnership with The Washington Post. The University of California Press printed this book in partnership with the Berggruen Institute. It is hard not to consider this book a sort of neoliberal project. Indeed, they even suggest that their

Think Long Committee itself is a template for the very kind of deliberative body — insulated from the short-term horizon of the partisan election cycle and special interests — that ought to be institutionalized as part of the new constitutional balance we propose going forward.

Presumably because Berggruen is a billionaire, the authors were able to speak with tech titans and political elites in interviews and at events held by their own institute. If their usage of adjectives describing the furniture in these sit-down scenes is any indication, they wanted the reader to know that they were there personally. Meanwhile, the Uber drivers that they surmise are empowered by the sharing economy went on strike in May. I believe they have ideas worth sharing as well.


Crystal Murphy is assistant professor of political science and director of the Master of Arts in International Studies program at Chapman University.

LARB Contributor

Crystal Murphy is assistant professor of political science and director of the Master of Arts in International Studies program at Chapman University.


LARB Staff Recommendations

Did you know LARB is a reader-supported nonprofit?

LARB publishes daily without a paywall as part of our mission to make rigorous, incisive, and engaging writing on every aspect of literature, culture, and the arts freely accessible to the public. Help us continue this work with your tax-deductible donation today!