For a brief moment after the collapse of the Soviet Union, liberal democracy appeared to have won the argument. Competitive elections, individual freedoms, market economies and the rule of law were expected to spread steadily across the world. Economic growth would generate a large and secure middle class, while authoritarianism would gradually retreat into history. Three decades later, that confidence looks remarkably misplaced.

Democratic institutions are weakening, populism is spreading and authoritarian politics is once again fashionable. Even in established Western democracies, large sections of the population no longer trust political parties, governments, universities, the media or experts. The question is no longer whether democracy is advancing, but whether it can survive its present crisis.

In his new book, What Happened to Liberal Democracy?, Nobel laureate Daron Acemoglu offers an uncomfortable answer: liberal democracy was not simply attacked from outside. It undermined itself from within. Liberal democracy prospered during much of the twentieth century because it delivered something concrete. It combined political freedom with rising wages, expanding employment, public education, social mobility and improved public services. Industrial growth required large numbers of workers, and organised labour possessed sufficient bargaining power to claim a reasonable share of the resulting productivity gains.

Democracy therefore had an economic foundation. Ordinary citizens defended democratic institutions because those institutions appeared to defend them. That connection has gradually been broken. Globalisation, deindustrialisation, automation and the growing dominance of finance and technology allowed businesses to expand without generating comparable numbers of well-paid jobs. Productivity continued to increase, but wages for large sections of the workforce stagnated. Trade unions weakened, employment became less secure and wealth became increasingly concentrated among the owners of capital and highly educated professionals.

The political consequences were predictable. People who were repeatedly told that the economy was performing well could see that it was not performing well for them. They were offered impressive national statistics while confronting insecure jobs, unaffordable housing, deteriorating public services and declining prospects for their children. There is only so long one can sell "inclusive growth" when most of the inclusion happens in PowerPoint presentations.

Acemoglu's most controversial argument concerns the rise of the educated elite. Liberalism began as a challenge to concentrated political, religious and economic power. But once liberal institutions became part of the establishment, their custodians began behaving like an establishment.

Policy increasingly became the preserve of professionals, technocrats, judges, academics and corporate managers who considered themselves better qualified to decide what society needed. Expertise is indispensable, but it became confused with a permanent right to rule. Citizens were consulted less, instructed more and occasionally reprimanded........

© The Friday Times