Why democracy needs a new plan

In a recent address former British prime minister Tony Blair described today’s moment as a global inflection point, a time akin to the early post-World War II years or after the collapse of the Soviet Union in 1991, when Western nations had to rethink and remake our policies both foreign and domestic.

In Blair’s words: “We need a new plan, a way of looking at the world, to make sense of it and how best to pursue the advancement of its people … Western democracies need a new project that gives direction, inspires hope, and is a credible explanation of the way the world is changing and how we succeed within it.”

He is right. We do need a new plan. We need to define and enlist allies in a shared global agenda to strengthen our national economies and democracies. To equip ourselves with the economic strength and political will to maintain a democratic rules-based order while checking authoritarian interests.

In this new moment of clarity and confrontation, we must demonstrate that our democratic systems deliver more in the form of both political freedoms and economic opportunity than strongman states — states that foster corruption at home, destroy basic rights, build dependency, and employ tools of coercion abroad.

We must also be honest about our own domestic challenges. In the US, UK and across Europe, faltering heartland regions and their alienated, angry and anxious residents are a prime driver of populist movements, particularly anti-democratic right-wing variants. These support a new nativism and advocate retreat from the international community. They are movements that support the rise of an authoritarian to “fix things”. Meeting these internal threats to our own democracies is a prerequisite for confronting the authoritarian challenge abroad.

Today’s urgent challenge differs from earlier inflection points. This is because yawning economic inequalities within Western democracies are today a primary driver of polarising populist movements, fuelling distrust and seeding instability in our democratic governance systems.

The wealthy few reap more, the middle class is hollowing out, and the poor bear the brunt of change, whether from globalisation, climate change or soaring inflation and cost of living.

Angry, alienated citizens

Particularly dangerous are the economic gaps between residents of thriving global city regions and the increasingly angry, alienated residents of communities left behind by economic change.

Arguably the implications of the growing divide were not fully grasped by Blair in the UK or a succession of US leaders over the past three decades. But the evidence of this divide has been growing for years, from the ailing factory towns of the American Midwest to the hollowed industrial centres of England’s north. Many of those living in regions experiencing relative economic decline responded to these conditions with support for anti-democratic populists, those who threatened to dismantle democratic governments from within.

During the last global inflection point Blair mentions in his Ditchley address — what philosopher and economist Francis Fukuyama billed the “end of history” — the Berlin Wall fell, the Cold War ended, and we saw the rise and opening to the West of both China and Russia (or so we thought). It seemed for a historical moment as if all nations could work together to nurture economic opportunity and freedom across the globe.

Later, with the US and many other nations reeling from the fallout of the great recession and the global financial crisis, the election of President Barack Obama was embraced around the world, suggesting renewed hope that the US under his leadership could join with allies to again constructively to address many emerging challenges.

Given the high expectations among many, particularly in Europe, it seemed possible that the time was right to forge new agreements and protocols on how we would work together to solve shared and global challenges around big topics: international security, climate change, terrorism, the stability of the financial and trading systems, health and education, civil and women’s rights, and the free flow of information.

But Obama got politically dragged down at home and found few kindred spirits among leaders abroad, including in Europe. The economic freefall of the working class, combined with the apparent exoneration of the global financial elite, contributed to public resentments and the rise of populist movements threatening democracy in countries of the West.

Ultimately, Obama’s foreign policy contributed to our current weaknesses with China, Syria and other countries, as it looked like a further retreat from US leadership in the global system.

As a result, a rising China ended up dashing Western hopes it would integrate with the West and democratise, as evidence has grown that not only was it not really joining in Western norms and our economic and political order, while economically benefiting from it, but rather had designs on how to supplant them. Finally, Russia’s invasion of Ukraine put an exclamation point on the obliterated Western hopes that it too could be trusted to join the family of nations.

Today it is increasingly clear that we are not going to forge new universal global agreements about how best to “run the world”. The postwar global institutions are being weakened in part by countries that do not want to play by these rules and in part by populists at home. These include Donald Trump, along with Boris Johnson until his recent comeuppance in Britain, Marine Le Pen in France, and now Georgia Meloni in Italy, who all wish to undermine these rules and the influence of the “globalists”.

Containment is not an option

And we cannot use the old playbooks to win the new competition. In this new pitched battle, containment — the strategy that won the Cold War — is not an option. As Blair points out, unlike prior inflection points, today the “East is on par with the West” in terms of economic clout. China is too big, influential and a tightly integrated part of the global economy and polity to simply isolate it and wait for the inevitable collapse.

Today’s contest can only be won by strengthening the hand of democracies and free people, strengthening the influence and numbers of those who want to play by an open rules-based and freedom-valuing regime, and enlisting in the struggle and linking arms with countries on the fence between the two systems, by offering a better and more attractive alternative.

Blair offers a similar diagnosis, but his proposed remedies are not up to the ambition of his call for a new “plan” for the West. He looks chiefly to the power of new and emerging technologies to solve a host of global challenges from raising living standards to improving healthcare to tackling climate change. Technology drives progress, but this is a very “top-down” approach, an expectation that miracle technologies from on high will save us all. We maintain that the work needs to begin from the ground up.

We propose to address the root causes of anti-democratic movements at home and abroad, and a new strategic foundation for democratic strength and unity abroad.

First, to heal our politics at home and douse the embers of anxiety and resentment that can be easily fanned to engulf our democracies, we must forge a more broadly shared economic condition. This entails closing yawning economic opportunity gaps that feed frustration, encourage nostalgia, and pull back from international collaboration. Part of this objective must be to empower as well as to rebuild the communities that have missed out. Everyone needs a stake if these local and global challenges are to be met, and everyone needs to feel in control of their own future.

It starts locally with national leaders helping to catalyse and support locally owned, operated and governed economic rejuvenation efforts. Democracy and market economies thrive when more people have more opportunity to contribute and reap the benefits. The project for leaders of Western democracies is to get busy learning how to listen to, respect, connect with and deliver for the working classes, particularly in the politically potent industrial heartland regions that are hotbeds of resentment and unrest.

Closing economic divides is also an urgent international project. As we are learning in our initiative to accelerate economic change in industrial regions, there is a convergence of interest and shared urgency in closing economic gulfs for the political benefits of social and political “peace” and cohesion. We need to take “what works” locally and spread and share effective approaches on a grander scale and with our allies. As international partners, we can learn from and assist each other in how to do this work well.

As we have documented, there are paths to new prosperity among the similarly situated industrial regions of the US, UK and Europe, including manufacturing communities that have lost their economic anchors. We have learnt that communities that have turned an economic corner build on their identity, who they are, what they make and produce, but take it into the future and diversify. They leverage the assets they have, and fashion and execute their own strategic vision and blueprint for economic change.

Some innovate and seed new businesses in emerging sectors by leveraging universities and research institutions. Others become the most highly trained and best educated communities. Some embrace a globalised world and build export industries, fashion new international entanglements, and welcome new immigrants. Still others grow their own green and blue sustainable economies based on clean energy and smart water solutions. Other community success paths are found by building on unique history, arts and cultural assets, or natural locations on the water or in the mountains, or otherwise developing community amenities that offer a rich quality of life and place.

Perhaps more important is what we have learned about how local and national leaders can best aid this transformation. First by meeting heartland residents with respect, understanding, and seeing things as residents of struggling regions do: the degraded downtowns, the loss of young people, the disappearance of important institutions.

By not patronising residents, talking down to them, or telling them they need to change or what they need to do. Change cannot be “done to” community residents. A new vision for the future and plan to get there must be locally owned and operated.

This work is an important priority for the West, but it has mostly to do with the domestic challenge of preserving our own democracy from threats within. We also need a new foreign policy and a more aggressive and effective international development, trade, investment and engagement agenda to counter authoritarians and strengthen the hand of the democratic alliance.

‘Ally-shoring’ a leading element

A robust “ally-shoring” plan is the lead element of this new affirmative foreign policy. One that works to strengthen our Western economies, shore up and expand our alliances, and make a winning offer to “on-the-fence” countries to work and benefit with us versus the corrupting and dependency-building development assistance “offers” emanating from China in particular.

Ally-shoring also mitigates supply chain dependencies by limiting exposure of critical supply chains, where we do not want to be over-reliant on rogue regimes, open to espionage and piracy, or to have our dependencies used as a tool of political coercion. Today we see clearly how dependencies on Russia’s oil, gas and grain, and China’s use of everything from personal protective equipment to critical minerals, both threaten consumers and markets.

A new alliance clearly needs to start with democracies around the world that want to work together and strengthen an open and free rules-based world order, as well as our economies, and by extension our political and (when needed) military influence. President Joe Biden has begun to try to jumpstart this type of effort with his series of democracy summits.

While starting with democracies, as Ash Jain and Matthew Kroenig argue in their recent excellent proposal for new trade strategy for democracies, we also need to include near-democracies, such as Vietnam, that are major economic partners, that we want to entice to move more in our direction, and that will agree to certain clear norms for open rules-based economic relations and development.

We also need lots of partners in the developing world if we are to keep the collective benefits of highly efficient global supply chains, including those implicating lower-cost producers. These countries benefit in turn through economic growth, rising living standards, and movement up the value-added food chain.

These two paths — revitalising our industrial heartlands and ally-shoring — will not solve all our world’s problems, but they are the right place to start. This is the way that our democratic values and institutions must save the day (again). As Blair rightly says, this is a political and economic crossroads for the world order and perhaps especially for those countries who after the end of the Cold War thought that these moments were behind us. We thought that history — at least in that sense — was at an end. But as real and proxy wars rage on, it is clear it is not.

As Daron Acemoglu and James Robinson remind us, both global and domestic democracies are on a “narrow path” and the future is not guaranteed, neither at home nor throughout the world. Which is why we in the West need a new plan.

Jeffrey Anderson and Andy Westwood contributed to this article.