NEW
YORK – Well before Donald Trump was elected President of the United
States, I sent a holiday greeting to my friends that read: “These times
are not business as usual. Wishing you the best in a troubled world.”
Now I feel the need to share this message with the rest of the world.
But before I do, I must tell you who I am and what I stand for.
I
am an 86-year-old Hungarian Jew who became a US citizen after the end
of World War II. I learned at an early age how important it is what kind
of political regime prevails. The formative experience of my life was
the occupation of Hungary by Hitler’s Germany in 1944. I probably would
have perished had my father not understood the gravity of the situation.
He arranged false identities for his family and for many other Jews;
with his help, most survived.
In
1947, I escaped from Hungary, by then under Communist rule, to England.
As a student at the London School of Economics, I came under the
influence of the philosopher Karl Popper, and I developed my own
philosophy, built on the twin pillars of fallibility and reflexivity. I
distinguished between two kinds of political regimes: those in which
people elected their leaders, who were then supposed to look after the
interests of the electorate, and others where the rulers sought to
manipulate their subjects to serve the rulers’ interests. Under Popper’s
influence, I called the first kind of society open, the second, closed.
The
classification is too simplistic. There are many degrees and variations
throughout history, from well-functioning models to failed states, and
many different levels of government in any particular situation. Even
so, I find the distinction between the two regime types useful. I became
an active promoter of the former and opponent of the latter.
I
find the current moment in history very painful. Open societies are in
crisis, and various forms of closed societies – from fascist
dictatorships to mafia states – are on the rise. How could this happen?
The only explanation I can find is that elected leaders failed to meet
voters’ legitimate expectations and aspirations and that this failure
led electorates to become disenchanted with the prevailing versions of
democracy and capitalism. Quite simply, many people felt that the elites
had stolen their democracy.
After
the collapse of the Soviet Union, the US emerged as the sole remaining
superpower, equally committed to the principles of democracy and free
markets. The major development since then has been the globalization of
financial markets, spearheaded by advocates who argued that
globalization increases total wealth. After all, if the winners
compensated the losers, they would still have something left over.
The
argument was misleading, because it ignored the fact that the winners
seldom, if ever, compensate the losers. But the potential winners spent
enough money promoting the argument that it prevailed. It was a victory
for believers in untrammeled free enterprise, or “market
fundamentalists,” as I call them. Because financial capital is an
indispensable ingredient of economic development, and few countries in
the developing world could generate enough capital on their own,
globalization spread like wildfire. Financial capital could move around
freely and avoid taxation and regulation.
Globalization
has had far-reaching economic and political consequences. It has
brought about some economic convergence between poor and rich countries;
but it increased inequality within both poor and rich countries. In the
developed world, the benefits accrued mainly to large owners of
financial capital, who constitute less than 1% of the population. The
lack of redistributive policies is the main source of the
dissatisfaction that democracy’s opponents have exploited. But there
were other contributing factors as well, particularly in Europe.
I
was an avid supporter of the European Union from its inception. I
regarded it as the embodiment of the idea of an open society: an
association of democratic states willing to sacrifice part of their
sovereignty for the common good. It started out at as a bold experiment
in what Popper called “piecemeal social engineering.” The leaders set an
attainable objective and a fixed timeline and mobilized the political
will needed to meet it, knowing full well that each step would
necessitate a further step forward. That is how the European Coal and
Steel Community developed into the EU.
But
then something went woefully wrong. After the Crash of 2008, a
voluntary association of equals was transformed into a relationship
between creditors and debtors, where the debtors had difficulties in
meeting their obligations and the creditors set the conditions the
debtors had to obey. That relationship has been neither voluntary nor
equal.
Germany
emerged as the hegemonic power in Europe, but it failed to live up to
the obligations that successful hegemons must fulfill, namely looking
beyond their narrow self-interest to the interests of the people who
depend on them. Compare the behavior of the US after WWII with Germany’s
behavior after the Crash of 2008: the US launched the Marshall Plan,
which led to the development of the EU; Germany imposed an austerity
program that served its narrow self-interest.
Before
its reunification, Germany was the main force driving European
integration: it was always willing to contribute a little bit extra to
accommodate those putting up resistance. Remember Germany’s contribution
to meeting Margaret Thatcher’s demands regarding the EU budget?
But
reuniting Germany on a 1:1 basis turned out to be very expensive. When
Lehman Brothers collapsed, Germany did not feel rich enough to take on
any additional obligations. When European finance ministers declared
that no other systemically important financial institution would be
allowed to fail, German Chancellor Angela Merkel, correctly reading the
wishes of her electorate, declared that each member state should look
after its own institutions. That was the start of a process of
disintegration.
After
the Crash of 2008, the EU and the eurozone became increasingly
dysfunctional. Prevailing conditions became far removed from those
prescribed by the Maastricht Treaty, but treaty change became
progressively more difficult, and eventually impossible, because it
couldn’t be ratified. The eurozone became the victim of antiquated laws;
much-needed reforms could be enacted only by finding loopholes in them.
That is how institutions became increasingly complicated, and
electorates became alienated.
The
rise of anti-EU movements further impeded the functioning of
institutions. And these forces of disintegration received a powerful
boost in 2016, first from
Brexit, then from the
election of Trump in the US, and on December 4 from Italian voters’ rejection, by a wide margin, of
constitutional reforms.
Democracy
is now in crisis. Even the US, the world’s leading democracy, elected a
con artist and would-be dictator as its president. Although Trump has
toned down his rhetoric since he was elected, he has changed neither his
behavior nor his advisers. His cabinet comprises incompetent extremists
and retired generals.
What lies ahead?
I
am confident that democracy will prove resilient in the US. Its
Constitution and institutions, including the fourth estate, are strong
enough to resist the excesses of the executive branch, thus preventing a
would-be dictator from becoming an actual one.
But
the US will be preoccupied with internal struggles in the near future,
and targeted minorities will suffer. The US will be unable to protect
and promote democracy in the rest of the world. On the contrary, Trump
will have greater affinity with dictators. That will allow some of them
to reach an accommodation with the US, and others to carry on without
interference. Trump will prefer making deals to defending principles.
Unfortunately, that will be popular with his core constituency.
I
am particularly worried about the fate of the EU, which is in danger of
coming under the influence of Russian President Vladimir Putin, whose
concept of government is irreconcilable with that of open society. Putin
is not a passive beneficiary of recent developments; he worked hard to
bring them about. He recognized his regime’s weakness: it can exploit
natural resources but cannot generate economic growth. He felt
threatened by “color revolutions” in Georgia, Ukraine, and elsewhere. At
first, he tried to control social media. Then, in a brilliant move, he
exploited social media companies’ business model to spread
misinformation and fake news, disorienting electorates and destabilizing
democracies. That is how he helped Trump get elected.
The
same is likely to happen in the European election season in 2017 in the
Netherlands, Germany, and Italy. In France, the two leading contenders
are close to Putin and eager to appease him. If either wins, Putin’s
dominance of Europe will become a fait accompli.
I
hope that Europe’s leaders and citizens alike will realize that this
endangers their way of life and the values on which the EU was founded.
The trouble is that the method Putin has used to destabilize democracy
cannot be used to restore respect for facts and a balanced view of
reality.
With
economic growth lagging and the refugee crisis out of control, the EU
is on the verge of breakdown and is set to undergo an experience similar
to that of the Soviet Union in the early 1990s. Those who believe that
the EU needs to be saved in order to be reinvented must do whatever they
can to bring about a better outcome.
