Monday, October 28, 2013

Runciman, The Confidence Trap

As we seem to lurch from one self-inflicted crisis in Washington to the next some people begin to despair. Is American democracy itself on the brink? Is democracy inherently flawed? In The Confidence Trap: A History of Democracy in Crisis from World War I to the Present (Princeton University Press, 2013) David Runciman highlights the tension between “the onward march of democracy” and the “constant drumbeat of intellectual anxiety.” Today, as the established democracies face four fundamental challenges—war, public finance, environmental threat, and the existence of a plausible competitor—“it is not clear,” Runciman writes, that they “are doing well in meeting any of them.”

Democracies have certain advantages over their rivals. For instance, they are better at surviving crises. At the same time, they seem unable to learn how to avoid crises. “It is some consolation in a democracy to know that nothing bad lasts for long,” but “consolation can produce its own kind of complacency. Knowing that they are safe from the worst effects of hubris can make democracies reckless—what’s the worst that could happen?—as well as sluggish—why not wait for the system to correct itself? That is why the crises keep coming.”

Starting with Tocqueville as “the indispensable guide to the ongoing relationship between democracy and crisis,” Runciman examines seven crises: 1918 (false dawn), 1933 (fear itself), 1947 (trying again), 1962 (on the brink), 1974 (crisis of confidence), 1989 (the end of history), and 2008 (back to the future).

Throughout Runciman illustrates versions of what he calls the confidence trap. For instance, it is too soon to act and it is never too soon to act. This tension was manifest in the opposing views of Sarkozy and Merkel during the Euro crisis: Sarkozy urged immediate action, Merkel believed that it was important not to be rushed.

Politicians can point to history as a rationalization for their bad behavior. “American democracy had survived its near-death experience in 1933. It had survived everything that had been thrown at it since. It had proved its adaptability and its resilience. There is less incentive for politicians to compromise if they believe the system can withstand most forms of confrontation.” (p. 284)

“This,” Runciman writes, “is the confidence trap. Democracies are adaptable. Because they are adaptable, they build up long-term problems, comforted by the knowledge that they will adapt to meet them. Debt accumulates; retrenchment is deferred. Democracies are also competitive, which means that politicians will blame each other for their failure to tackle the long-term problems. However, they do it in a way that gives the lie to the urgency, because if it were truly urgent, then they would compromise to fix it. Instead they squabble. … So democracy becomes a game of chicken. When things get really bad, we will adapt. Until they get really bad, we need not adapt, because democracies are ultimately adaptable. … Games of chicken are harmless, until they go wrong, at which point they become lethal.” (p. 285)

Scaremongers argue that profligate spending is pushing the U.S. to the point of a full-scale default. Not so, Runciman replies. “The institutional constraints on sustained fiscal irresponsibility would kick in before then. The real problem is not that the United States will knowingly walk off a cliff. It is that no one knows where the edge of the cliff is, or which of the intermediate ridges along the way—the lesser ‘fiscal cliffs’—pose real danger.” … The U.S. may “get itself into more trouble than it realizes because it will be unable to tell apart the point when deferring retrenchment keeps its options open from the point when deferring retrenchment closes them down. Credible systems, like credible banks, can find they lose credibility quickly and unexpectedly.” (pp. 312-13)

Runciman uses dialectical tension to strike an appropriate balance between optimism and pessimism. He opts not to assume that we will eventually encounter the crisis that overwhelms us. He refuses to see politics as inherently tragic; democracy “is too inadvertently comical for that.” (p. 324) At the same time, he believes that democracy is a series of mismatches, that it displays a repeated pattern of crisis and recovery. “The long-term strength of democracy comes from its short-term restlessness; it is also at risk of being undermined by its short-term restlessness.” Put in the most general of terms, “democracies succeed because they fail and they fail because they succeed. There is no way around this.” (p. 304)

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