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Why Democracy Matters

On Illiberal Democracies, Part III
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Just to make it simple, let’s define Europe’s “illiberal democracies” as those countries where elected leaders profoundly disagree with the liberal, inclusive, affluent worldview of the EU’s political classes.

The British disagreed with this worldview so violently that they left the Union altogether. Most of the other “illiberal” democracies aren’t in strong enough positions to leave (yet), but many of them would if they could.

We are talking about the UK, Italy, Switzerland (not an EU member), Austria, Hungary, the Czech Republic, Slovakia, Poland, and Russia (also not a member) at the very least. In other words, the great majority of Europe’s people are living in illiberal democracies, with only a few liberal democracies huddled up precariously against the Atlantic seaboard. How could this have happened? What went wrong?

If you ask the EU political classes or the media they control, the problem is simple: unscrupulous populist politicians are duping their citizens by playing on their fear of immigration and of losing their sovereignty. Certainly, there is something to this, but it’s better to assume that the “everyone out there is stupid except us” explanation is usually wrong.

Instead, if you talk with people in central and eastern Europe, you get a very different explanation: the problem is with the EU itself. After all, illiberal or not, the illiberal democracies are at least democracies, which is far more than we can say about the EU.

The EU itself recognizes that it has a so-​called “democracy deficit.” But that’s a euphemism — the EU isn’t a flawed democracy, it’s an autocracy. As I’ve noted before, of the many institutions that make up the EU, only one — the European Parliament — is elected, and it is powerless. It best resembles the late unlamented Supreme Soviet, the USSR body that rubber stamped Stalin’s decisions. Or maybe the National People’s Congress in China, which meets for two weeks every year to rubber stamp Xi’s decisions.

Meanwhile, the powerful EU bodies — the European Council, the Council of the European Union, the European Commission, the European Central Bank — are all appointed bodies.

So if the EU isn’t democratic, and if even the EU recognizes that it has a “democracy deficit,” and if Britain has already left in disgust and many other countries are infuriated, why in God’s name doesn’t the EU do something about it?

The answer, unfortunately, is straightforward: the EU doesn’t want to be a democracy, it simply wants to get its way. If the EU were a democracy, what chance would it have of imposing hated migration policies on its member states? How could it possibly foist a vast array of bureaucratic requirements on people who despise those rules? In what dream world could it impose its liberal, inclusive, affluent worldview on cultures that are based on religion and tradition?

To be fair to the EU, its laws, rules and policies aren’t arbitrary. On the whole they are designed to improve the health, justice, environment, and efficiency of Europe and its people. If we simply looked at each EU rule, law or policy one-​at-​a-​time, it would be hard to find much to object to. The problem, however, is that there is always a delicate balance between the desirability of any new rule and the harm that rule does to the people it is imposed on.

But the EU officials can’t make that balance because they are operating from inside an elite bubble that, even if we happen to agree with it, represents a fringe worldview relative to the wild diversity of Europe.

The EU doesn’t recognize that permitting increased migration of desperate people from foreign cultures threatens long-​established existing cultures. It doesn’t appreciate that rules designed to improve health outcomes or to standardize products interfere with people’s freedoms to live their lives as they wish. It doesn’t understand that extending rights to minorities inevitably diminishes the rights of the majority. It doesn’t seem to care that every action it takes reduces the sovereignty of every member nation.

These aren’t new problems and they aren’t easy problems. They are so problematic, in fact, that over the entire course of the human experience we have managed to find only one way to make such decisions in a consistently sound manner: via democratic processes.

In other words, as a thought experiment, let’s assume that every rule the EU promulgates is a better one than a democratic EU could promulgate. (Setting aside the breathtaking arrogance of that assumption.) The correct response to that is: so what? The point of governments isn’t to make endlessly good decisions, even if it were possible always to distinguish good from less good rules.

No, the point of governments is to create an environment in which citizens can maximize their wellbeing, their dignity as individuals and their happiness as members of society. You don’t do this by issuing commandments from on high and you don’t do it by installing technocrats who ignore the popular will. You do it by allowing people to participate in their own governance, to have a say in the rules that govern their lives.

Like it or not, the EU is a kind of roach motel: once you get in, you can’t get out — the economic consequences are just too awful. But the UK showed it can be done.

The future of the EU thus resolves itself into this: What are the chances that member states will become so irritated with the EU’s autocratic ways that they will no longer care about the economic damage of exiting? The highly educated political class that operates the EU are certainly smart people, and they undoubtedly mean well, but they lack a more important characteristic that would allow democracy to plant itself in Brussels: wisdom.

My guess is that, unless the EU democratizes itself (a highly unlikely outcome), the “illiberal” democracies will continue spread across Europe and the EU will continue to devolve until even its economic allure won’t save it.

Next up: Shined Shoes Can Save Your Life


Greg Curtis

Gregory Curtis is the founder and Chairman of Greycourt & Co., Inc., a wealth management firm. He is the author of three investment books, including his most recent, Family Capital. He can be reached at . Please note that this post is intended to provide interested persons with an insight on the capital markets and is not intended to promote any manager or firm, nor does it intend to advertise their performance. All opinions expressed are those of Gregory Curtis and do not necessarily represent the views of Greycourt & Co., Inc., the wealth management firm with which he is associated. The information in this report is not intended to address the needs of any particular investor.

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