Inequality and Democracy

Wen Jiabao
Outgoing Chinese Premier Wen Jiabao: “Social strains are clearly increasing.”

Outgoing Chinese Prime Minister Wen Jiabao today added his voice (not for the first time) to those warning against rising inequality as a threat to China’s development.  Imbalances in economic growth he warned were threatening the success of the economy.  “We must make ensuring and improving people’s wellbeing the starting point and goal of all the government’s work, give entire priority to it and strive to strengthen social development,” he added.  It is a common refrain, and one that goes to the root of modern statecraft.

The battle between communism and capitalism that dominated the twentieth century was often expressed in terms of equality.  Communism offered most hope for the weakest in society, for the downtrodden, for the less well off.  While communists celebrated their optimistic vision of what the world should be like, capitalists sneered, venting a a cynical realism that inequality was a fact of life, so we’d better get used to it.  Of course, Capitalism only succeeded with the emergence of the welfare state, as a counter balance to the excesses of inequality that Capitalism inevitably wrought.  And Chinese communism only survived 1989 and Tiananmen Square by embracing capitalism and the market, albeit within state control.

Zizek captures it well in his First as Tragedy, Then as Farce.   In his section on Capitalism with Asian values (p. 131ff), he refers to Deng Xioping‘s visit to Singapore who innovated the concept.  What happened at this crucial moment, more than twenty five years ago, was that just as the Berlin Wall came down and Capitalism celebrated its triumph, the link between democracy and capitalism was broken.   This was a momentous event, that went al the way back to the French Revolution.  Two hundred years – almost exactly! – of unfettered and the seemingly choreographed evolution of capitalism and democracy, to the point of becoming a western liberal tradition, was sundered in that historical moment.

Today, we see it in the anachronisms and curiosities of our age.  In democracies, we feel disempowerment, disenfranchisement.  Large corporations look like governments, and cartels run major sectors of the economy.  Elites are resurgent (did they ever go away?), just as democracy tried prima facie to crush them.  The walls of social immobility are being rebuilt in a semi-feudal model.  There are the lords and the serfs, and there is no longer a middle class.  Sometimes we call them the working poor.  At UN level, the process of Development was seen as being in lock step with Democratization, and while that was an overtly (if unstated) political and anti-communist objective during the Cold War, it persisted with perhaps more benign force after 1989.  Where stands democracy now?  Is the democratization of Africa a legitimate goal for the betterment of its people?  Would the people of Greece agree?  Argentina?  It’s not so clear – and the alternatives that have been tried appear unpalatable.  But from a position where democracy was seen as the least worst option, many are taking the view now that democracy really is a pretty bad option.