Larry Diamond on Democratic Recession, Tech Takeovers, and the Crisis of Leadership

Leadership for Society: Public and Private Leadership in a Democratic Recession

Key Concepts:

• Democratic Recession: Decline in democratization and rise of autocracy globally.
• Political Polarization: Increased division and lack of bipartisanship within a country.
• Social Media's Impact: Role of social media in promoting outrage, distrust, and political polarization.
• Globalization's Effects: Impact of trade liberalization, deindustrialization, and immigration on established communities.
• Within-Nation Inequality: Increasing economic disparity within countries and its contribution to political anxiety.
• Normal vs. Abnormal Politics: Distinction between conventional political processes and actions that undermine democratic norms.
• System Capture: The risk of wealthy individuals or entities manipulating the political system to serve their interests.
• Marketplace of Ideas: The concept of open exchange of ideas, balanced against the need for societal norms and protections.
• Short-Term Thinking: The focus on immediate returns and its detrimental effects on long-term societal and corporate health.

I. The Global and Domestic Democratic Recession

• Global Trend: The wave of democratization that peaked in the early 1990s has reversed into a "democratic recession." Autocracies like China and a resurgent Russia are gaining power. Countries like Venezuela, Turkey, and Hungary, once democratic, are moving towards authoritarianism.
• US Parallels: The US faces similar challenges: increasing political polarization, loss of trust, and a degradation of political culture.
• Trump Era: The Trump presidency marked a dedicated assault on democratic norms, institutions, and practices, including due process, the rule of law, and the independence of key institutions.

II. Factors Driving the Democratic Recession

• Social Media: Social media's business model rewards outrage and emotion, contributing to political polarization, distrust, and even violence.
  • Example: The configuration of social media algorithms to prioritize engagement over rational discussion.
• Globalization: Trade liberalization and immigration pressures have led to feelings of cultural threat and fueled illiberal populism in Europe and the US.
  • Example: The rise of populist movements in Germany, Italy, France, Britain, Spain, Poland, Hungary, and the United States.
• Within-Nation Inequality: Increasing economic disparity and insecurity have exacerbated political anxiety and polarization.
  • Data: Inequality between nations has diminished, but inequality within nations has increased almost everywhere.

III. The Role of Private Leadership

• Normal Politics: Private leadership from the business sector and civil society has been ineffective in building coalitions to address societal challenges.
  • Example: Lack of initiatives to transcend partisan polarization and find common ground on issues like immigration and healthcare.
  • Deliberative Polling: Deliberative polls show that when people are exposed to balanced information, they tend to converge towards sustainable majority policies.
    • Institution: Deliberative Democracy Lab at Stanford, led by Professor James Fishkin.
• Abnormal Politics: The US faces an unprecedented situation with a president seemingly intent on dismantling the rule of law and concentrating executive power.
  • Example: Firing inspectors general, ravaging the civil service, and intimidating the judiciary.
  • Lack of Response: Private leaders have largely failed to provide a coherent or courageous response to this situation.

IV. Oligarchy and the Marketplace of Ideas

• Oligarchic Tendencies: Concerns about the concentration of resources and political voice in the hands of a few, potentially leading to system capture.
  • Example: Elon Musk's acquisition of Twitter and its potential use as a political instrument.
• Countermeasures: Countering this requires alternative mechanisms of influence and more effective organization of responses.
• Historical Parallels: The power and control element of wealthy individuals with political agendas is not entirely new, drawing parallels to figures like William Randolph Hearst.
• Tax System: The tax system could be used to address the increasing concentration of wealth and its associated political power.
• Reconsidering the Marketplace of Ideas: The need to rethink how we manage what is allowable in the marketplace of ideas, balancing free speech with societal norms and protections.
  • University Context: Universities struggle with balancing free speech and academic freedom with the need to maintain a tolerant and respectful environment.
  • Title VI of the Civil Rights Act: Universities have an obligation to respond to incidents that risk creating a hostile environment for members of a particular group.
• Social Media Exemption: The argument for treating social media differently from other public squares due to its private ownership, virality, and volume.
  • Section 230 of the Federal Communications Act: The exemption for social media in section 230.

V. The Future and the Role of Private Sector Leaders

• AI and Regulation: The need to balance the potential benefits of AI with the risks to democracy, requiring careful consideration of regulation.
• Responsibility to Democracy: The overarching question of what responsibility private sector leaders have to democracy and society.
• Collective Action Problem: The challenge of individual actors taking responsible actions when their competitors may not, highlighting the need for public regulation.
• Zuckerberg Example: Mark Zuckerberg's decision to decimate Facebook's content moderation force as a response to the perceived political environment.

VI. Advice for Future Leaders

• Short-Term Thinking: The fundamental problem of short-term thinking driven by the focus on quarterly returns to shareholders.
• Long-Term Perspective: The need to refashion the incentive structure to enable deeper, longer-term thinking, both for the health of corporations and the nation.
  • Example: TSMC's success due to its longer-term logic.
• Collective Action: The importance of corporations working together with other institutions to address collective action problems.

VII. Synthesis/Conclusion

The interview highlights the challenges facing democracy both globally and within the US, emphasizing the roles of social media, globalization, and inequality. It calls for private sector leaders to take greater responsibility for the health of democracy, moving beyond short-term thinking and engaging in collective action to address societal problems. The discussion underscores the need for a nuanced approach to regulation, balancing innovation with the protection of democratic values.