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Walter Molano | Back to the Classics

Published:Wednesday | February 28, 2018 | 12:00 AM
In this Wednesday, March 1, 2017 file photo, a woman walks on the Spanish side of the border between Spain and the British overseas territory of Gibraltar, whose future is in doubt as Britain prepares to exit the European Union.

Political commentators are constantly fretting about the crisis that democracies are facing around the world. They point to the rise of Donald Trump, Brexit and the unbridled power of Russian President Vladimir Putin.

Latin America has had its share of potholes, including the Kirchners, Lula and Chavez. Traditional political party systems are crumbling around the region, from Chile to Costa Rica and Colombia. People are asking: How did this ever happen? Is political freedom at risk?

Interestingly, these topics have been addressed by political philosophers for thousands of years. Most universities used to cover these topics, but western civilisation 101 and political thought 102 have been replaced by New Age subjects, such as entrepreneurship 101 and computer programming 102.

Yet, the shortcomings of democratic systems were laid bare more than 2,000 years ago in Plato's Republic and as recently as 230 years ago in Federalist Paper #10. Although not exactly light reading, the two works are powerful injunctions against the dangers of pure democracy.

Athens was known as the cradle of democracy, but its experience with the political arrangement was less than ideal. It is no coincidence that Plato's political treatise was called The Republic, and not Democracy. That is because he argued that a republic, or an indirect form of government, was superior to a democratic arrangement. While snobby, by today's standards, he argued that voting was too complex for the general public, and a certain degree of education was necessary to vote. Of course, this has been a tool that has been used to disenfranchise people on the basis of their colour, race and creed.

However, Athens' democracy had been hijacked several times by demagogues. The literal translation of the word is 'the leader of the rabble'. Demagogues were popular individuals who would offer easy answers to difficult questions. One such example was Alcibiades, a charismatic and wealthy Athenian who rose to power, only to undermine basic civil liberties and plunge the city-state into a disastrous military campaign in Sicily.

Plato had first-hand knowledge of the dangers of democracy when his beloved teacher, Socrates, was wrongly charged and condemned by a mass jury. Fast-forward to 1787, James Madison, the author of Federalist Paper #10, had an equal disdain for pure democracy. Liberty may have been the rallying cry of the American Revolution, but the concept had different meanings for different people.

Worried about democracy

Rich states, like New York, worried that democracy meant rule by the masses. The founding fathers understood that such an arrangement would not bode well for businesses or people with property. That is why Madison, and the other writers of the Federalist Papers, went to great pains to argue that the newly written constitution described a republican form of government.

This was an indirect form of representation, with elements such as an Electoral College, Supreme Court justices who were appointed for life and Senate seats with six-year terms. Students of politics know that purely democratic political arrangements typically pander to narrow interest groups and the lowest common denominator. Madison's biggest concern was the chance that a powerful faction would move into the majority, thus exacting damage to property rights or removing civil rights from minority groups.

Madison defined factions as a group of individuals who were united by a common interest, passion, or wishing to adversely affect the rights of other citizens. His solution to the problem was to create a sufficiently large republic with a multitude of factions competing against each other, such that none would gain the upper hand.

So what happened? The symptoms are easy to see, but the causes are not so evident. Technology probably played an important role. This is a process that has been under way for more than a century.

Advances in communications and transportation technology have facilitated the creation of what Madison called majority factions. Radio and television allowed people with a common cause to aggregate. This was seen with the rise of populist leaders, such as Adolf Hitler, Benito Mussolini and Juan Peron. The process has recently accelerated with the advent of the Internet and social media. Likewise, the dismantling of republican institutions allowed more direct participation and aggregation.

In Latin America, the old fears of the poor altering the distribution of wealth and property rights came true in places like Argentina, Venezuela and Ecuador. These were textbook examples of what Madison warned in Federalist Paper #10.

The pitfalls facing democratic nations are nothing new. The flaws of democracy have been well documented for thousands of years. Therefore, in order to inject a bit more stability into the political systems, a little bit of Platonic republicanism may be needed.

- Dr Walter T. Molano is a managing partner and the head of research at BCP Securities LLC.

wmolano@bcpsecurities.com