The rise of the faux democracies

What the recent spy scandal says about big and small government

I hate to sound like a libertarian, but there seems to be a problem with democracy and the problem is government. Unfortunately, the debt crisis afflicting much of the industrialized world has focused the debate on whether government is too big or two small. I am a firm believer that there is no such thing as big or small government: a government can be too big in all the wrong places, but also too small in areas where society would benefit hugely from its presence. Indeed it seems to me that Western democracy (particularly its Anglo-Saxon variety) has swayed too far into this inefficient equilibrium, one which – to use a domestic example – appears scarily like the father who leaves their kids out on the street all day, and then abuses them when they are at home. It doesn’t take a genius to see what kind of children/citizens this noxious type of paternity creates in the long run.

Big brother is blinding you

Big brother is blinding you

Leviathan is alive and kicking

The US and Britain are undoubtedly the poster boys for this new kind of two-headed government: one which is a true leviathan in the ways that its all-powerful security apparatus puts a stranglehold on society, but at the same time retreats from its socio-economic responsibilities. It justifies the former attitude by the claim that they are at war with “terror”, however laughably ambiguous this concept is. To be fair, that these countries are in the cross-hairs of terrorist groups is unquestionable; according to the NSA, the data captured through its PRISM program managed to thwart 50 terrorist attacks. Perhaps this is true, perhaps it’s an exaggeration. But this has left some serious questions on the legal and constitutional mandates that such espionage programs rest upon, and most importantly, whether a democratically elected government has effectively been given a blank check to spy on its own citizens. The West, including the US and UK, has criticized Turkey’s prime minister, Tayyip Erdogan, for his wild claim that “winning three elections” gives him the mandate to rule as he wishes. But how is justifying domestic and global espionage in the name of the war on terror any different? How to justify even more blatant abuses such as spying on diplomatic missions, even from military allies? Considering the filth that just two whistle-blowers (Bradley Manning and Edward Snowden), have uncovered about these programs, one can only wonder what appalling and outright criminal acts these two self-described standard-bearers for democracy and freedom have done or are capable of doing.

Of course, leviathan doesn’t just spy on the world, it carries a heavy hand at home – but only when it wants to and only on who it wants. Britain, for example, is the country in the world with most CCTVs per head (1 per 14 people), notwithstanding the fact that the evidence is weak on whether CCTV is an effective deterrent on crime (I personally support it through its role in identifying criminals after a crime has been committed, but the British justice system prides itself on being less punitive than its American counterpart so my point is moot). During the London riots, people caught looting on CCTV were given some rather heavy sentences as an “example”. Society, for the most part, supported these sentences. But few people seemed to notice the irony of youths from deprived communities getting sent 6 months to jail for stealing a water bottle, while not a single banker has been sent to jail for their role in crashing the global economy. That’s mostly because nothing they did is actually illegal, which pretty much shows us exactly where the problem lies. A captain who grounds a cruise ship (like the Costa Concordia) and endangers his passengers due to imprudence, negligence or incompetence can face charges, but a financier can get fired at worst. Democracy is underpinned by the rule of law, but the law is clearly not on your side.

There are many more examples of this selective use of authority. Take, for example, the attitude against “benefit scroungers”, who have been vilified by the Tory government in the UK and by Republicans in the US as practically the root of all evil (and the root of all debt). Yet in the UK, at least, benefit fraud accounts for £1.2 billion, which represents just 0.7% of the total cost of welfare. A pittance, especially considering that the amount gained through unclaimed benefits is actually higher than the amount lost through fraud. Meanwhile, the tax avoidance in the UK during 2010-11 was estimated at a whopping £32 billion. True, there has been a recent social outcry on firms such as Amazon, Google and Starbucks which have used tax loopholes to avoid paying UK tax, as well as on other firms which use tax heavens abroad (most of which are UK territories). But has anything concrete come out of this? No, the scroungers face the wrath of the law and go to jail if they’re caught. Multinationals, on the other hand, get constantly reminded of their positive contributions to the economy and to society.

Absent when it needs to be present

The flip side of the coin is therefore how this same fearsome leviathan turns into nothing more than a washed up jellyfish when it comes to promoting the welfare and livelihoods of its citizens. Following the Friedmanite mantra of being “free to choose”, governments since Thatcher and Reagan have increasingly equated freedom as only that which the market can provide, never mind the fact that the more enlightened strands of economics now suggest that choice isn’t necessarily better (I suggest the works of behavioral economist, Richard Thaler, on this topic). Are Americans truly freer because they can choose their 401K pension plan despite the fact that there’s no guarantee it’ll last them throughout their retirement? Are Britons truly freer because they can now buy a council flat even though home ownership is now out of reach for millions due to skyrocketing real estate prices? Now don’t get me wrong, I’m no fan of wasteful and overprotective welfare states but you don’t need to pull out a history book to be reminded of the colossal decline in well-being between the current generation and the baby boomers before them. This was evident even before the crisis, and even in spite of the roaring nineties and noughties. Disguised by the allure of shiny new iPads, the fact of the matter is that life has gotten much more difficult for the grand majority of people in the Western world, and this is largely because governments have systematically retreated from their social responsibilities under the argument that markets work better. Always (they may most of the time, but it’s those few times where they don’t that have such a huge impact on well-being). Worse yet, these same governments sold this process as a golden era to its citizens. And citizens believed it.

And that, ladies and gentlemen, brings me to my final point. What more noble role is there for enlightened government than to stop society from making stupid mistakes? Isn’t government here to tell us that signing up for a subprime mortgage when you’re broke and unemployed is a bad thing to do? Or to tell us that we’re saving too little for our retirement? Or to guarantee us free healthcare when we get sick? If not, then why do we need these faux democractic governments (defauxcracies?) in the first place now that they have strayed so far from the social contracts that their enlightened predecessors crafted?

Oh, that’s right, to save us from the A-rabs.

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