Are technology and globalization undermining the middle class?

In The End of History (1992), Francis Fukuyama famously argued that the collapse of Soviet communism marked the end of human ideological evolution. Liberal democracy had triumphed and would face no further significant challengers. He still thinks that’s true, but now he detects a different kind of challenge to liberal democracy: its own failure to respond to a changing world.

Technology and globalization are undermining the middle class, which is the foundation of liberal democracy, Fukuyama warns. While Americans enjoy the use of cell phones and other technological innovations, the financial rewards of economic change have accrued “disproportionately to the most talented and well-educated members of society.” Globalization is increasing economic inequality.

The only dynamic political response has come from the Tea Party, whose members, despite their antielitist rhetoric, “vote for conservative politicians who serve the interests of precisely those financiers and corporate elites they claim to despise.” Fukuyama, a fellow at Stanford University’s Center on Democracy, Development, and the Rule of Law (and a onetime leading neoconservative thinker who broke ranks with the movement several years ago), contends that what America needs more than anything is “serious intellectual debate” over how to respond to the new globalized capitalism. Yet despite the momentary success of Occupy Wall Street, the Left has failed to create “a plausible progressive counternarrative.”

In the universities, leftist thinkers have embraced postmodernism, feminism, and other culturally oriented intellectual trends that simply can’t mobilize popular majorities. A bigger problem is the Left’s “lack of credibility” in the political realm. It mainly defends a social-democratic agenda of “social services, such as pensions, health care, and education,” that are no longer affordable at current levels, and is unable to offer much that is new.

The Left needs to articulate an “ideology of the future” that can compete with the Right’s libertarian populism, Fukuyama contends. That ideology should “reassert the supremacy of democratic politics over economics and legitimate anew government as an expression of the public interest.” But simply defending the welfare state won’t do. “The ideology would need to somehow redesign the public sector, freeing it from its dependence on existing stakeholders and using new, technology-empowered approaches to delivering services.”

Nothing will be possible, however, unless the Left develops a strong critique of neoclassical economics, which provides the theoretical underpinning for today’s reigning ideology. Among other things, the new ideology must show that “people’s incomes do not necessarily represent their true contributions to society” and that the existing distribution of incomes is not necessarily the fairest.

Many of the elements of a new way of thinking about society are out there. Until they are assembled, Fukuyama concludes, the middle class will continue to believe that “their interests will be best served by ever-freer markets and smaller states.”

THE SOURCE: “The Future of History” by Francis Fukuyama, Foreign Affairs, Jan.–Feb. 2012.

Photo courtesy of Flickr/Alex Eylar