How Eastern Europe blew up the West
12 Jan 2017|

Like the rise of Soviet communism and both World Wars, the Western liberal order’s apparent collapse in 2016 could turn out to be yet another historic upheaval that began in Eastern Europe. Hungarian Prime Minister Viktor Orbán’s brand of ‘illiberal democracy’ was quickly adopted by Poland’s de facto ruler, Jarosław Kaczyński, and is now making inroads in the heart of the West—first with the United Kingdom’s ‘Brexit’ referendum, and then with Donald Trump’s victory in the United States’ presidential election.

Meanwhile, Turkey’s nascent democracy has already given way to Recep Tayyip Erdoğan’s strongman rule, and the Philippines is now led by a populist authoritarian, Rodrigo Duterte. As we head into 2017, something is clearly rotten in the state of democracy.

It may seem unlikely that Orbán and Kaczyński—who both trained as lawyers under their countries’ communist regimes—have become globally influential political entrepreneurs. But their political project has all the features of what management research recommends for a successful innovation strategy. Like many disruptive products and popular brands, illiberal democracy does not try to please everyone; rather, it targets a carefully selected segment of ‘voter-customers,’ and gives them exactly what they want.

When Hillary Clinton called Trump’s supporters a ‘basket of deplorables,’ she quite accurately described one segment of the political market that Orbán’s innovation targets. But the illiberal democrat speaks not only to reactionaries eager to restore traditional social hierarchies, but also to working-class voters fearful of unemployment and downward mobility. The rest of society—ethnic, religious, and ideological minorities, including the urban ‘creative class’—then forms the opposition.

Illiberal democracy subverts the idea—held by European social democrats and American Democrats since the Civil Rights era—that working-class and minority voters should forge a progressive alliance to counter conservatives. Intellectually, such a ‘stronger together’ alliance makes sense; but it has three major flaws that Orbán and Kaczyński have exploited.

First, the economic interests of white (or native) working-class voters and those of minorities are often not aligned, because they are competing with one another for jobs and social benefits. This is especially true when slow growth turns the division of the economic pie into a zero-sum game. When funds are limited, should the Hungarian government spend money on educating Roma children, or on retraining displaced ethnic Hungarian workers?

Second, working-class voters often adhere to traditional conservative values. While a farmer in Eastern Poland or a factory worker in Michigan might be persuaded to support gay rights or women’s empowerment in exchange for economic redistribution, working-class voters have not supported such causes in large numbers.

Illiberal democracy is effective because it disentangles desired goods from unwanted add-ons, which is the essence of modern business innovation. Just as Airbnb allows us to find lodging without unnecessary hotel frills, illiberal democrats offer working-class voters economic help with no civil-rights strings attached.

Third, in many electorates, members of a social majority seem to value vilification of minorities as an intrinsic good, irrespective of wealth transfers. And as Yale University’s Amy Chua and others have shown, targeting minorities can be a highly effective tool for political mobilisation.

In the business world, it is widely understood that successful products are not just useful; they also provide customers with a distinct experience. In illiberal democracy, that experience relies on the spectacle of denigrating various ‘others.’ Indeed, many businesses, such as the companies that produce violent video games and reality-TV shows, have similarly exploited our basest instincts. Trump’s reality-TV show The Apprentice probably taught him how effective sowing division can be as a political-marketing tool.

Orbán’s insight, taken up by Kaczyński, was that an illiberal coalition comprising the working class and social reactionaries may be more viable than the old progressive project. Meanwhile, Hungary and Poland were ideal ‘early adopters’ of this innovation, because both countries are ethnically homogeneous, which makes minorities particularly weak and vulnerable.

But illiberal-democratic politics can also win elections in diverse societies such as the US. Like many successful products, illiberal democracy offers voters a fundamentally straightforward value proposition. Contrary to progressive agendas, the illiberal message is easy to understand, not only because it is often mendaciously simple, but also because its two target groups’ conservative cultural values inherently align.

Moreover, illiberal democracy can ignore issues that it considers to be non-essential, such as human rights and the rule of law: its only imperative is to satisfy its customers. More surprisingly, illiberal democrats also do not seem to be overly concerned about economic growth. Hungary had a relatively robust recovery after the 2008 recession, but its economy is now slowing; and in both Poland and post-Brexit UK, the high economic costs of illiberal democracy are already apparent. If Trump pursues his promised trade protectionism in 2017, he will likely push the entire world into recession.

This could be illiberal democrats’ fatal flaw, or it could represent their most daring political bet of all. Building a dynamic, creative economy in a closed society may not even be possible, but this does not matter if electorates in mid- and high-income countries no longer consider growth to be as important as identity.

Like a lousy seat on a low-cost airline, or the frustration of assembling IKEA furniture, illiberal-democratic electorates may regard economic stagnation as an acceptable price to pay for a more familiar world—one where the state guarantees the dominant in-group’s sense of belonging and dignity, at the expense of ‘others.’

Those of us who have lived in Orbán and Kaczyński’s world understand that illiberal democracy is no temporary aberration. It has all the hallmarks of a carefully conceived, innovative political strategy that may prove to be sustainable. Indeed, in a few decades we might look back and wonder how liberal democracy, with all its complexities and internal tensions, managed to hold on for so long—unless, that is, progressives treat 2016 as a wake-up call, and finally start to innovate, too.