The American Interest
Policy, Politics & Culture
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The Crisis in the West
Published on January 18, 2013

A year ago, the world was abuzz with talk of the euro crisis and the feared disintegration of the European Union. By the end of 2012, the discussion has shifted to the crisis of the liberal democracy model itself. The debate is no longer “Keynes vs. Hayek” or expansionary vs. austerity fiscal measures. At the heart of today’s debate are the systemic problems affecting Western civilization.

The current political process, which has been a cause for ever-increasing concern, can be called the “Crisis Triad.” On the one hand, we are witnessing a conflict between a dynamic, ever more aggressive global capitalism and the system of liberal democracy that took shape in the aftermath of World War II, which was somewhat revamped in the 1970s. On the other hand, we can point to a conflict between political and economic mechanisms on one side and post-industrial social structure and social aspirations on the other. The existing liberal democratic political institutions can neither halt the growth of social inequality nor guarantee social justice and legitimize the technocratic decision-making of the ruling elite, which is becoming increasingly distant from society at large. While American society is at least accustomed to social inequality at some level, Europeans have proven to be totally unprepared for the decline of the welfare state. The European crisis also turned out to be especially severe, insofar as the European community, which claims to be the only “normative power” in the world, has shown itself incapable of using normative values to preserve social stability or solve the social problems of the past decade (such as demographic decline, an aging population, migration, the failure of multiculturalism and others).

In the 1970s, the West, and the European countries in its midst, were able to overcome economic crisis with the help of neoliberal instruments and by limiting the role of the state, thus unleashing free market forces. But it is precisely the neoliberal cure that is under attack today. All attempts to resolve the crisis through economic or technocratic means delegitimize the process of governance, since they are not supported by many voters. European society is losing faith in democratic institutions because they are failing to secure social stability and are offering no vision of the future. Thus, parties, parliaments and governments are losing their credibility. The support for the Unified Europe project is declining. Where we once discussed the transition to democracy, we have now begun deliberating on the “transition from democracy.” People are turning to nationalism and extremism, and see their salvation in a strongman. Hungary provides a stark illustration of this general trend. Even in Communist times, that country was at the forefront of the democratic reform movement, but in recent years it has seen serious backsliding.

In addition, EU power structures have become alienated from European society, merely a bureaucratic appendage. European politicians have resorted in some cases to limiting democracy in the hope that this would help them overcome the fiscal crisis and prevent the disintegration of the European Union; however, the people, unable to have any impact on EU economic decisions, end up trusting their governments even less.

An ostensibly improved situation in the United States does not alleviate these concerns. As everyone surely remembers, American complacency and faith in self-regulating market forces were a major cause of the 2008 financial crisis. The failure of the Anglo-Saxon model of capitalism and lack of faith in the current administration’s ability to redefine it are not the only causes for concern today. Francis Fukuyama presents a cogent argument on “political deadlock” in the United States. There is an international angle to the crisis too: the current American leadership is also growing less committed to and capable of maintaining its hegemonic role in the world; meanwhile, the world is not ready for multipolarity.

Under these conditions, we are seeing a resurgence of support for authoritarian capitalism. The supporters of this model, who had been quiet for many years, are again chanting their mantras. Quite often, they seek to negate liberal democracy by heaping praise on authoritarian regimes. Their ideal is China, though talk of the “China Model” is not quite what it was even a year ago, given the country’s problems with corruption, social and ethnic unrest, and heavy-handedness by the authorities. Putin’s Russia occasionally is also cited admiringly, though there, too, Putin’s support inside Russia is declining. Still, the resurgence of support for authoritarian capitalism reveals the crisis of Western political thought, which has so far been unable to find ways to recast the liberal democratic model.

The current crisis of liberalism as model and ideology appears to be much harder to overcome than the previous ones. Leadership emerges as the central issue. Can the leaders who were not prepared for the crisis, and who are now attempting to deal with it pragmatically through minor adjustments, rise up to the new challenges? We are here primarily talking about President Obama and Chancellor Merkel, the respective leaders of the only global and European superpowers. Neither of them was ready for the current crisis or for the need to assume global and pan-European responsibilities. Neither wished for it, and both are clearly trying to avoid it, instead pursuing a policy of retreat and pragmatism—which is merely another form of avoiding strategic responsibility. We will see very soon whether Merkel and Obama are capable of demonstrating “transformational leadership”, which calls for special personal characteristics such as resolve. Their ultimate success will rest on their ability to realize the need for normative and systemic change, as well as on their readiness to set the West’s collective agenda and demonstrate the will to implement it. True, we still argue over some questions: whether the change in the Western political system will come from the leaderships’ efforts, as it was in the past, or whether change will only come by reducing or eliminating the role leaders play in the search for new decision-making mechanisms. If it is the latter case, then who is going to be the “transformational” force in the Western community? We should not forget that overcoming crisis through change contradicts the Western elite’s current efforts to maintain the status quo.

All this prompts another question: How does the crisis of liberalism affect authoritarian and totalitarian societies? Preoccupied with its own “malaise” (the term bestowed upon President Carter’s dour assessment of the economic crisis of the 1970s), the West seems to lack the strength and stamina to assess the impacts of its illness on the world around it. But sooner or later, the West will be forced to do this. No doubt these global impacts will be negative ones that will reflect back on the West itself.

It is already evident that the crisis of liberal democracy and its inability to provide both economic stability and social justice in the post-post-industrial society are leading to disillusionment with the West as a model across many segments of illiberal societies. Of course, whether these societies will overcome their current conditions depends on internal processes and their readiness to accept the new rules of the game. But the discrediting of the West’s model will hardly facilitate their exit from authoritarianism. Some in the West may dismiss these concerns by saying, “So what? How will this affect us?” We would reply that the deceleration of transformational processes in illiberal and undemocratic societies will have a negative impact on Western civilization’s external environment. Not all authoritarian regimes will be as friendly to the West as was Mubarak’s Egypt. This deteriorating external situation will strain the budgets of Western countries, since they will have to increase their defense spending. Thus if Western civilization loses its appeal, its very existence will be threatened, and, moreover, illiberal societies will face a far more painful transition to freedom.

The new historic situation undermines the Western model of influencing the world, specifically its democracy promotion policy. Can democracy promotion be on the agenda when the democracy promoters themselves cannot solve their own problems? The answer should be yes, but Western philanthropists already face increasing complications working in illiberal societies.

There is a certain correlation between the rise of liberal democracies and the democratic awakening of illiberal societies. This could be seen in the 1970s and 1980s, when the progress in the West coincided with the post-Communist “velvet” revolutions. The picture is less clear today. For instance, the Arab revolutions occurred as the West was entering its crisis stage. Actually, due both to internal factors and to the opposition’s disillusionment with Western policies, these revolutions could yield a decidedly undesirable result for the West, though that is far from certain. Anti-Western Islamic democracy or Islamic authoritarianism could pose a serious challenge to replace the challenge of traditional authoritarianism, especially if the latter enjoyed Western support.

High hopes for “color” revolutions in the post-Soviet states—Ukraine, Georgia and (less so) Kyrgyzstan—were also dashed, although these countries have remained within the framework of political pluralism. But lest we forget, political pluralism—of the oligarchic type—did not prevent Russia from sliding back into the authoritarian abyss. The movements in Eurasia seemed so promising that they were even dubbed “the fourth wave” of democratization; today we refer to the region in terms of a “democratic recession,” as demonstrated by Freedom House’s latest Freedom in the World report, which reveals a seventh consecutive year in which losses of freedom outweigh gains. 

The irony is that the crisis of the West arrived in sequence with the gradual awakening of Russian society. However, further scenarios involving such an awakening could be dramatic. First, the Russian personalistic regime still possesses a lot of resources and can reproduce itself in a more repressive form. Second, the crisis of the liberal democracies will not allow them to create external stimuli to press Russia’s transformation forward.

Nevertheless, a new unexpected factor emerges alongside this rather bleak assessment of the Russian future: Western elites are looking for a new mechanism to deal with Russia. The Magnitsky Act is an example of this new experiment. Provided the will and determination are there, the Magnitsky Act may create a new mechanism to influence the corrupt authoritarian elites while at the same time cleansing Western societies of their own sources of corruption.

The West’s reputational decline brings up another concrete goal: the need to reformat Western foreign policy. The internal crisis in the West must lead to changes in the way liberal democracies engage the outside world—to a new foreign policy paradigm. This paradigm should be based on the “New Balance” of interests and norms—in other words, a return of the normative dimension to foreign policy, which has substantially weakened after the breakup of the Soviet Union and been distorted by the American invasion of Iraq.

Some seasoned analysts of political evolution are cautiously optimistic about the future. Francis Fukuyama, in The Origins of Political Order, says that “a society successful at one historical moment will not necessarily always remain successful given the phenomenon of political decay” (p.482). But having offered this warning about historical uncertainty, he also expresses hope for the West, concluding that “there is, however, an important reason to think that societies with political accountability will prevail over ones without it.” Philippe C. Schmitter is moderately optimistic too: “European democracy will survive both these crises [the Euro crisis and the crisis of the European Union], but in doing so it will have to become even more different that it already is from the brand of democracy that Social Democrats  and Christian Democrats built in the years following World War II” (“Europe’s Disintegration”, Journal of Democracy, October , 2012, p. 45). Schmitter believes that European democracy has to devise a “new social contract” and a more regulated economy, not to mention the novel channels of democratic participation and mechanisms of accountability to citizens. At the moment, however, developments are going in the opposite direction.

Let us hope that Fukuyama is right, that Western civilization has better chances than do other civilizations for prolonging its lifecycle. Perhaps the crisis of the current model has to intensify in order to prod liberal democracies toward this renaissance. Only an obvious crisis will force the political elites in liberal democracies to undertake possibly painful but meaningful reform. While pondering possible exits from communist systems for the countries of Eastern Europe, Ralf Dahrendorf said that these societies will have to go through the “valley of tears”—that is, they will have to make tough choices in order to reject the old rules of the game. Apparently, the same fate awaits Western civilization: It will have to walk through its own valley of the shadow of death before it adopts a system that will allow it to successfully resolve its “Crisis Triad.”

Lilia Shevtsova, an AI editorial board member, is senior fellow at the Carnegie Moscow Center. David J. Kramer, a former Assistant Secretary of State for Democracy, Human Rights and Labor, is president of Freedom House in Washington, DC.