Is Liberal Democracy Sustainable?

Over the course of the 20th century, democracy emerged from being a rare form of rule enjoyed by perhaps 3 percent of the world’s population to become its most common political system by the end of the century. Universal suffrage, fair elections and civil liberties were then enjoyed by over half of the world’s people. Today, democracy is in retreat, in part due to the erosion of liberal and democratic culture. We propose an interdisciplinary working group to explore the following questions: How do liberal-democratic institutions sustain the liberal-democratic culture they require, and how might this process fail? And: What role can economic institutions in particular play in the sustainability of a liberal democratic culture?

These questions are not new. A prominent tradition in economics represented the market as the only allocation mechanism compatible with a limited state, which is seen as a condition for sustaining a liberal political order (Friedman, 1962; Hayek, 1948). However, given current commitments to social insurance, mitigating unfair inequalities, and the challenge of climate change, a growing number of scholars now question whether laissez-faire economics can constitute the political economy of sustainable liberal democracy.

A quite different economic pillar in support of liberal democracy – dating back to James Harrington’s (1656) The commonwealth of Oceana – is economic autonomy and individual agency, exemplified by a property-owning class of farmers and other independent producers. But like laissez-faire, autonomy based on landownership has little relevance to today’s economy (at least in the middle- and high-income countries), in which the vast majority of income earners are employees, not independent producers.