Tyranny Is Downstream From the Economy

Welcome to the topsy-turvy 21st century, where everything is upside down. Democracies exist that are not democracies, coups that are not coups. Gone, for the most part, are the twentieth century’s coups d’état that installed military dictators in place of legitimate governments; nothing so clean-cut or understandable belongs to our time. Today’s tyrants are more often elected presidents and prime ministers who subtly undermine representative governance from within, a phenomenon known as democratic backsliding. Once-proud democracies like Hungary and Turkey have slipped into long-term authoritarian rule; Poland seems to be shaking it off, for now; and the United States has begun an alarming and rapid slide of its own. What forces really drive this backsliding and what can be done about it? Despite the similarities in the autocratic playbook, the reasons are so complex that it can feel overwhelming for the modern-day democrat wondering how to react. 

A new and important book on democratic breakdown, Susan C. Stokes’s The Backsliders, connects the dots by illuminating the relationship between economics, polarization, institutional failure, and our Trumpist moment. Stokes shows that rising economic inequality, driven by globalization, explains why the world’s democratic recession is happening now. There are four major reasons why backsliding takes place: economic anxiety; cultural factors, such as immigration or race; failing institutions, including political parties; and the behavior of backsliding politicians themselves. But above all, The Backsliders makes a decisive, data-backed case for the role that economic inequality has played in bringing us to our unhappy moment—fueling popular resentment, distrust of institutions, and the rise of demagogues worldwide who pledge to sweep it all away.  

Though the book offers modest recommendations to reverse backsliding, that isn’t the main value of Stokes’s contribution. She has drawn a relatively straight line from economics, through culture, institutions, and politicians, to today’s mess. As for the need for a strategy to arrest and reverse the degradation of our democracies, I’ll offer a few notes of my own later. Stokes provides the receipts to explain how we slid so far, but more work is needed to climb our way back out. 

Stokes and colleagues analyzed backsliding in 22 countries from the end of the 20th century through to 2020. The sample—which spans a wide range of countries from Hungary to the Philippines, from the United States to Turkey—is tested against a range of possible drivers of democratic erosion. A lack of economic development is found to contribute to backsliding, “but only weakly.” Social media, for all its problems, has little substantive effect. How long a country has functioned as a democracy also has no meaningful impact. At the end of the day, Stokes finds that economic inequality within a country is the key variable. Pointing to her own statistical acrobatics to examine the data from all sides, Stokes writes: “the statistical association between inequality and erosion was very robust: try as we might, we had difficulty getting rid of the statistical result. The association between income inequality and erosion held up to many different measures of inequality, and in one hundred different models we estimated.” 

There are some nuances to the findings. First, what Stokes is talking about here is a propensity to backslide. Smoking increases the propensity to get lung cancer, but doesn’t guarantee that you’ll get it. Similarly, inequality increases the likelihood of democratic erosion, but doesn’t guarantee it. Still, the findings are significant, for the most unequal countries have a propensity to backslide of up to 32 percent in a given year. One anomalous data point comes from Central and Eastern Europe, which has less inequality than Western Europe, but has had greater erosion since the 1990s. “We suspect,” Stokes writes, “that change in income inequality is what mattered, more than its level. Inequality can be salient because it is high or because it has grown at startling rates, as it did after the fall of communism.” Stokes also finds evidence for trans-national “contagion dynamics,” which the world is experiencing now. In the early part of the 21st century, these contagion effects were less prominent, but in recent years they’ve become impactful as would-be autocrats feed off each other. 

In the back half of The Backsliders, Stokes gives life to her subtitle, Why Leaders Undermine Their Own Democracies, by looking at the behavior of politicians and voters. She explores three ways that politicians, specifically backsliding presidents and prime ministers, cling to power by keeping their electorates in line. First, they use their powers to alter the political playing field, for example by redrawing political lines or by disqualifying political opponents. Second, they attack their political opponents using inflammatory, delegitimizing rhetoric—which can gain traction among voters when societies are more unequal.  

A third form of attack Stokes calls “trash-talking” democracy. Trash-talking allows the autocratically inclined to flex their power by undermining the public’s confidence in any institution that might operate independently, such as election administrators, the judiciary, central banks, and the media. Stokes’s contention is that polarization gets much of the attention while trash-talking does just as much work. One of the advantages of trash talking, in contrast with attacking the opposition, is that it can carry less risk of directly exciting a counter-mobilization. Because, for instance, Trump endlessly slanders American elections as “rigged” and “stolen,” his own attempts to rig and steal them might not seem beyond the pale to voters, who have been absorbing this narrative for a decade. 

The Backsliders wades into longstanding debates among experts about what drives democratic breakdown. In the United States, the debate on Trumpism has often been reduced, simplistically, to cultural versus economic explanations. Looking globally, as Stokes does, scholars have seen a new “era of autocratization” with four driving components: economics; culture; flailing institutions, especially political parties; and politicians’ behavior. These social scientists have been wrestling for some years to account for which of these four is most responsible for democratic erosion and which is symptomatic versus causal.  

One of the helpful things Stokes does is provide an explanation for both political polarization and the behavior of would-be autocrats that is connected to economics, which ties the four elements into a larger story. For my part, I would not argue that cultural or institutional variables aren’t critical. They clearly are. But what has failed to crystallize sufficiently in the literature is the decisive contribution of economic inequality. 

The Backsliders will sharpen this debate about democracy and the role of economic inequality in countries of the Global South and North alike. Many readers will leave wondering what can be done, for 72 percent of the world now lives under authoritarian rule, and the trendlines are heading in the wrong direction. At the Global Fund for a New Economy, where I work, we partner with policy experts, grassroots organizers, philanthropic donors, labor leaders, and businesspeople interested in building a more inclusive and sustainable economy. What many of us have come to see is that the end of economic globalization, what is sometimes called “neoliberalism,” coincided with a rising democratic recession. To put it this way, the neoliberal model sowed the seeds of its own demise by contributing to widespread economic inequality and thus also to authoritarianism’s rise around the world. But where do we go from here? 

The Backsliders ends with a quick look at some strategies to resist and repeal democratic erosion. This section of the book is cursory and will leave the reader wanting more. But Stokes prompts some important questions, which I would put thus: What is the economic strategy to get us out of this mess? If inequality breeds autocracy, what is an economic agenda for democracy? I want to offer three elements of what might make up such an agenda. 

First, we need a substantial remaking of our economies, a “high road” economic model, a term I borrow from legal scholar Joel Rogers. High road economic development is characterized by public and private investment in research, technology, and innovation that bolts economic growth to growing prosperity for the working and middle classes. As Rogers often says, the aim of public policy should be to incentivize the high road and block the path to a low road economic model that hollows out the middle class. Any viable strategy to get on the high road needs to balance longer-term transformation with short-term policies that benefit working families so as to stabilize public support. 

For example, the recent rise of green industrial policy is a good thing because it tackles the climate crisis and can foster high wage development, but it can take years to show results, a problem that the Inflation Reduction Act suffered before its recent gutting. In order to buy time for longer-term economic retooling, we have to attend to the immediate, felt economic struggles of families and communities. On this front, one of the most urgent things to do is to win the battle against inflation and price instability, and to do so with a creative policy toolbox that signals to voting publics that their pain is seen and acted upon.  

The Mexican government under President Claudia Sheinbaum, among the most popular governments in the world, has learned this lesson. The Sheinbaum administration has deployed a range of tools, from subsidies to negotiated agreements with retailers to investing in public competitors in the marketplace, to hold down prices on everything from tortillas and instant coffee to fertilizer and mobile phone services. Perhaps more importantly, the government has launched a modern-day fireside chat where the president communicates with the public on a daily basis, including on cost of living matters. Elsewhere, failure on inflation helped bring down governments in Germany, Argentina, and the United States in the past two years alone.  

Second, there is urgent need for an economy that is more empowering to workers, communities, and small businesses. As many have noted, including the philosopher Elizabeth Anderson, if you have democracy in politics and autocracy in the workplace and in the economy, eventually you won’t have democracy anywhere. Strengthening labor unions is the most obvious thing to do, for this allows workers to practice democracy in the workplace on a daily basis. Tackling extreme precarity is another element. Fifty-nine percent of Americans can’t absorb a $1,000 emergency. Programs that help stabilize those on the edge are essential to broadening participation in the economy. It is this bolstering of human agency in the economic arena, of dignity, that is a good in itself and a bulwark against authoritarianism. 

Third, the nihilism of anti-democratic forces opens up new opportunities to undercut the political base of authoritarians and to foster more broadly shared prosperity. Let’s look at the matter of public investment in innovation. In the recent past, government money was invested in private companies to innovate with insufficient guardrails. Take the massive public subsidies to Elon Musk’s businesses Tesla and SpaceX—$38 billion, according to The Washington Post. Nowadays Musk racks up labor and other legal violations while leading the charge to destroy the very bases of American innovation. In the long term, this destructive profiteering from authoritarian forces will only anger and further economically disenfranchise the voters who placed them in power. In so doing, it offers an opening to align workers, communities, and business leaders in a new pro-democracy, high road economic project.  

Susan Stokes has brought a raft of data and insight to the question of what has driven democratic slippage around the world since the turn of the century. The Backsliders helps us to better understand the tactics of would-be autocrats, to wrap our head around the motivations of voting publics, and most importantly, to see clearly how the neoliberal era of globalization triggered this democratic recession. As the saying goes, when you’re stuck in a hole, the first thing to do is to stop digging.