The re-run of the Greek parliamentary election on June 17 is only the latest symptom of the most serious crisis to plague Western democracies and open societies since the 1960’s. Liberal democracies in the West today are struggling to avoid – and in doing so are exacerbating – a crisis of identity, which puts the existing social contract at risk and threatens their implosion.
The end of the Cold War bequeathed our leaders with a new set of governance challenges, which promptly grew in magnitude, in large part owing to faster globalization, the consequences of the 1980’s economic liberalization, and the 1990’s revolution in information technology. These challenges, insufficiently addressed, soon led many to question the sustainability of liberal democracy’s appeal at home and its universality abroad, and to probe the alleged merits of the “Chinese model,” best characterized as a form of authoritarian or state capitalism.
The financial meltdown of 2008, which soon metamorphosed into the deepest Western economic recession since the 1930’s, added fuel to the fire, as policymakers hunkered down in a non-transparent crisis-management mode, condoning massive state intervention in the economy and socialization of private-sector losses on a previously unprecedented scale. The resulting fiscal austerity plunged many below the poverty line and accelerated economic inequality, while many private institutions, having caused the 2008 bust, recovered on the public dime.