By Paul Baines, Professor of Political Marketing

With the collapse of the Soviet Union in the late 1980s, political scientist Francis Fukuyama heralded the “end of history”. Capitalism, founded on democratic freedoms, was on a roll. It was a system that had proven its viability and ‘rightness’, and would over time be shared by nations globally as the essential political infrastructure for prosperity and stability for all.

The tensions between people and nations - of course - have not, and will not, go away. The pre-eminence of capitalism and liberal democracy over the past 30 years has been accompanied by, and been a major cause of, more political complexity: extremism, terrorism, and the growth of new and more powerful challengers to the status quo. Not a victory procession, but the beginnings of the ‘failure’ of capitalism and democracy.

So the political shocks of 2016 need to be seen less in terms of the traditional battles between parties and policies, not as aberrations but signals of deep-rooted change. The entire infrastructure of politics, how it works and people’s relationship with it, is on unsteady and shifting ground. 

Disenchantment with politicians and the political process is a familiar theme. What we’re seeing now is a more overt and prolonged disinterest in party politics, as well as a serious questioning of the legitimacy of governments as organisations demanding tax payments and a licence to control decision-making.

The broad and familiar political principles of right, left and centre are being replaced by personalities, strong characters often attached to single issues of popular interest. The general territory of political debate in the developed world, confined for the past 50 years within what might be called ‘Liberal Democracy’, is becoming only a dim background to the more vivid and popular campaigns. Brexit and Trump are the obvious examples to us, but there’s also the success of the outsider Emmanuel Macron and his On the Move! campaign in the race for the French Presidency; the rise of the Five Star Movement in Italy (which began as a satirical blog) and the large share of votes for Austria’s anti-establishment Freedom Party. As the common ground breaks up, as more groups - particularly what might be called the traditional working classes - feel unrepresented by the consensus of elites, there is going to be a polarisation of political views, more outsider political players and unexpected grabs at power. 

Voting in itself is likely to become seen as a less significant and valuable political act. Instead there will be more activism outside of democracy: protests, boycotts, flash mobs, crowdsourcing, more direct contact with politicians, more concentrated and localised bursts of demands. At the same time, digital technology will make more direct involvement possible in politics beyond using voting solely for elections, the opportunity to open up to voting on major national issues - for example, the future of autonomisation and its impact on employment, or votes to agree details of legislation. Estonia is a country which has already used crowdsourcing to support political decision-making. In terms of  re-engaging populations in politics, and in particular, younger voters, more online voting could make a significant difference to the landscape. Harder questions are going to be asked about the legitimacy of government institutions and the cost of the systems involved. In the UK, where corruption is traditionally seen as a problem suffered by other nations, scandals over MPs expenses, the non-payment of taxes by big business and the perks enjoyed by members of the House of Lords , have all had a lasting effect on attitudes to the political system. Less interest in political principles opens up a debate on the value of democracy based on debate versus an efficient technocracy running nation states.

The big question now is what follows on from the age of capitalism and democracy?

To suggest a ‘failure’ of current systems is perhaps the wrong term. The world is likely to see the ‘re-shaping’ of democracy and politics in general, just as there wasn’t so much a failure of communism as a move to new tactics to achieve the same aims. That’s the reality of big political ideas. They tend to have worked as masks to deliver popular support and understanding, but used to reach economic and geopolitical goals in terms of power and influence. Russia a good example. Communism was initially a powerful means of creating the USSR and global influence. Over time, communism didn’t prove to be the most effective way to maintain that position. The dominance of elites over the mass population, the lack of any real emancipation or improved standards of life, led to a basic disconnection. Instead Russia moved to a more pragmatic oligarchy, and is now in the process of finding ways to re-claim its level of influence in the region, taking back control of companies in private ownership and assets where it can. Similarly, the USA had its ‘empire’ of sorts, based on trade and its ownership of systems of regulations as a means of building non-military forms of control. This also helps to explain why there hasn’t been a relentless march towards democracy in every nation - it’s not always been seen to be a useful way of transitioning power. There has been no prospect of a genuinely democratic system in two of the world’s largest states, China and Russia and it is difficult to see this being the case in the medium term future.

China is another example of a nation adapting an ideology to suit changing realities, very successfully creating a form of state capitalism, setting up its own state companies that can generate enormous wealth. There are hints here of how more governments are likely to be more able to maintain political support and engagement with democracy by taking on more control, by moving away from the liberal reliance on laissez faire and free trade that we’ve been used to in the West, to more government intervention, and the kind of nationalism needed to protect more of its populations from economic shocks.

In future history lessons, this period will be seen as the one which marked a turning point; either as the decline of the relative dominance of Western capitalism or as the resurgence of non-Western nations, depending on which happens to the greater degree first. Only through a revitalised politico-economic system can the West avoid such a fate. Such revitalisation would need to re-emancipate the people, encourage greater concentration of state and private investment resources, and rebuild communities from the polarised groupings that are increasingly in existence today in the West. We’re turning a page it seems, the question is how Western governments will now respond.

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