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Journal cover: Competitiveness Review

Competitiveness Review

ISSN: 1059-5422

Online from: 1991

Subject Area: International Business

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Preserving democracy, investing in the future!

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Article citation: Abbas J. Ali, (2012) "Preserving democracy, investing in the future!", Competitiveness Review, Vol. 22 Iss: 1, pp. -



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Article Type: Editorial From: Competitiveness Review: An International Business Journal, Volume 22, Issue 1

The depth of the current financial crisis and its associated persistent popular protests in Athens, New York, Rome, and many other major cities across the globe calls for profound reconsideration of existing political and economic premises. This crisis represents not only a fissure in the economic system but also a serious threat to democracy as a system essential for economic prosperity and unbridled creative engagement. While a free market economy may not necessarily result in a flourishing democracy, the latter is essential for thriving economic institutions and social and economic justice. More importantly, vital democratic institutions sustain optimism and the promise of national competitiveness.

The fear of a degenerating democratic order constitutes a frightening scenario. This fear is real and the possibility of democracy degenerating into a system dominated by secrecy and an Orwellian ethos has severe consequences to economic growth and a competitive work environment. Like any other system, democracy should not be taken for granted. In fact, democracy is subject to impairment and even demise. John Adams, the second President of the USA and a key founding father, once warned, “Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.” That is, democracy must be cultivated and the conditions for its flowering must be sustained. These conditions are not independent of prevailing social, political, and economic factors. Indeed, revitalization of democracy becomes an urgent task that demands a collective action and must not be left to the whim of a certain group or a few elite.

President John Adams further explained that a lack of morality, the primacy of selfish interest, absence of accountability, and persistence of an elitist mentality, can lead to destructive consequences and the demise of democracy. He stated:

Democracy will soon degenerate into an anarchy; such an anarchy that every man will do what is right in his own eyes and no man’s life or property or reputation or liberty will be secure, and every one of these will soon mould itself into a system of subordination of all the moral virtues and intellectual abilities, all the powers of wealth, beauty, wit, and science, to the wanton pleasures, the capricious will, and the execrable [abominable] cruelty of one or a very few.

Specifically, Adams was advancing the thought that to sustain a functional political and economic system preserving democracy and the societal fabric has to be given priority. In recent years, however, three developments have made such a goal difficult to attend to without careful planning and concentrated efforts to organize and deploy resources. These developments are:

  1. globalization: de-sovereignization and marginalization of community;
  2. IT: the fragmentation of public space; and
  3. power: concentration of wealth and influence.

Certainly, globalization, advancements in IT, and social power have contributed significantly to the betterment of human wellbeing. Nevertheless, individually or collectively, these developments have produced intended or unintended outcomes risking the lives and welfare of people in different parts of the world. Globalization, while easing business conduct and enlarging the arena for competition, has empowered multination corporations (MNCs) relative to some states in the developing world and enabled powerful Western nations to deliberately weaken national governments in many parts of the world. Indeed, instead of capitalizing on peace dividends resulting from the abatement of the Cold War, Western countries have shown an appetite for re-colonization of other nations under various pre-texts. The military invasion of several countries in recent years has not only led to devastating human and natural resources in the targeted countries but also an increasing expenditure on weapons, thereby, diverting scarce resources to unproductive areas.

Furthermore, globalization has increased uncertainty and fear among various segments across the globe. While uncertainty may lead to anxiety, fear often deepens inwardness, extremism, and skepticism. These obstruct talent development and deployment making it difficult if not impossible for certain segments of the international community to actively participate in or benefit from economic globalization. Likewise, many critics point out to the emergence of super global organizations which have contributed to the power erosion of national institutions and impinged on national sovereignty. The results of these, according to critics, are the marginalization of communities, be they in the developed or developing world and the eclipsing of the possibility of an emergence of sound democratic institutions, especially in the developing world.

In the absence of vital local countervailing forces, societies have neither the means to effectively make globalization “benefits” available to a wider population nor the resources to build social and legal institutions capable of ensuring economic and political progress. These societies, therefore, will have difficulties in focusing their educational and political priorities. In addition, whether in the developing or developed world, the financial crisis reveals shortcomings in the existing political systems and in capitalism. This calls for a rethinking of certain premises of capitalism (e.g. profit maximization, unfettered competition, aggressive market expansion, etc.). In fact, these premises, even if they are realistic, hinder democracy as the first two are driven by selfish interest and are more likely to further the marginalization of the poorest segments of society. Aggressive market expansion has induced MNCs to utilize their superior capabilities and resources to influence needs and wants in the new markets, thereby, more than likely, changing the traditional patterns of consumption and production. Once traditional patterns dissipate, recovering them amounts to an impossibility.

Though IT has created ample opportunities in the marketplace, eased transaction and conduct, and accelerated social change, it has however enabled individuals and groups, especially the social media, to focus on a single issue. This narrow focus, though it has advantages, can lead to what Ivan Krastev (Freeland, 2011a) calls “fragmentation of public space.” Krastev argues that the social media has created a situation where instead of all of us being part of a single public debate, we consume only “the information that confirms our biases.” Therefore, it becomes much harder to construct “the common civic space upon which a functioning democracy depends.” Though the new social media has given non professional individuals an opportunity to exert their influence and freely voice their political and social opinions, it has failed to create a coherent public forum to foster democratic involvement and tradition. There is also a fear that, as happened in the Arab spring, authoritarian states, endowed with seemingly unlimited oil money and supported by Western powers, will steer regional public uprisings to their advantage, enabling less educated and religiously manipulated groups to dominate public debate to the detriment of democratic order. Most importantly, when the focus is only on a single issue and narrowly educated classes dominate the public sphere, society is deprived of voices of wisdom, broad knowledge, and a sense of history essential for fostering a democratic tradition.

The third primary development is related to power concentration where wealth and influence are confined in the hands of a small group. While this situation, with varying degrees, has always been the case across history, in recent decades it has reached an unprecedented peak. Furthermore, both globalization and IT advancement have made it possible for small groups of people to easily promote its design and priorities to a wider segment of the global population and to merge the rest of the population into a global consumption regime. These communities which are artificially joined global consumption regimes cannot afford to enjoy the new consumption patterns without borrowing. Therefore, most of them are left struggling to alleviate mounting debt and to face an uncertain future alone. The latter accelerates alienation and increasingly transforms various social groups into a dependent class.

The outcomes of the three developments are predictable: less attention to investment in the future, eroding optimism among the wider population, emergence of a permanent underclass (e.g. groups that have been living in poverty and those who have been living on welfare, etc.), the shrinking of the middle class in traditionally industrial nations, limited social class mobility and solidifying of elite power, and rising spiritual and moral disintegration. These have given rise to extremism and or apathy. Consequently, most societies have become segmented and dominated by elite and lobbyist groups. However, segmented societies do not thrive and without vigorous virtues (self-reliance, personal responsibility, industriousness, and a passion for freedom), these societies are doomed to decline (Brooks, 2011).

While the flourishing of the elite and lobbyists is a normal phenomenon in modern society, it is the lack of social mobility, elite entrenchment, and the viewing of public concerns and desires as a burden that constitutes a menace to democracy and the virtue of pluralism. The new elite, because of their remarkable market success and possibly their unwillingness to ponder the social and economic realities of today’s world, look on with contempt at the unfortunate vast majority of the world population. Freeland (2011b) succinctly captures this when she states:

What is more relevant to our times, though, is that the rich of today are also different from the rich of yesterday. Our light-speed, globally connected economy has led to the rise of new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members […] feel they are the deserving winners of a tough, worldwide economic competition – and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly.

In their quest to maintain power, both the entrenched elite and their lobbyists often seek to limit investment in public projects, especially health, education, and infrastructure. Furthermore, driven by selfish interests, these elite look for ways to limit access to economic and political opportunities thereby endangering the democratic tradition while frustrating entrepreneurial and risk taking spirits.

Preserving democracy is impossible without investing in the future. This investment includes focusing on human formation and development by revitalization of education and research institutions and building world class infrastructures. Indeed, curtailing the downward path of any nation, as Friedman (2011) argues, requires “studying harder, investing wiser, innovating faster, upgrading […] infrastructure quicker and working smarter.” These are essential for growth and prosperity. Future oriented investment, however, is a far reaching possibility without a thriving democracy and social mobility. To revitalize democracy, investing in what is essential for the growth of citizens, assuming responsibility, and engaging vigorously in social and economic affairs must become a national priority.

Abbas J. Ali


Brooks, D. (2011), “The vigorous virtues”, New York Times, September 1, available at: (accessed November 6, 2011)

Freeland, C. (2011a), “REFILE-COLUMN-Hungary’s revolution and the Arab Spring-Freeland”, Reuters, June 16, available at: (accessed November 6, 2011)

Freeland, C. (2011b), “The rise of the new global elite”, The Atlantic, January/February, available at: (accessed November 6, 2011)

Friedman, T. (2011), “Win together or lose together”, New York Times, August 6, available at: (accessed November 6, 2011)

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