Democracies have many faults. Their leaders can blunder as badly as dictators. Their citizens can be just as foolish as anyone else. A cursory knowledge of history will teach you that there is nothing inherent in the natures of the Americans, British and Danes, say, that makes them superior to the Iranians, Chinese and Zimbabweans. They are just as likely to follow disastrous policies; just as susceptible to manias.
After they have blundered however, the benefits of living in an open society should assert themselves. Democracies face the truth of what they have done, and see their faults clearly. They hold the guilty to account. They find new ways to ensure that they do not repeat old mistakes.
In short, they reform, and show that not only are democracies freer countries than dictatorships, but that they carry within them a self-correcting mechanism.
That is the theory in any event. The practice is another matter
Anyone looking for the reforms the great crash of 2007/8 produced will squint until their sight goes. True, the regulators tightened the Basel rules on what capital banks must hold to help them through panics, and President Obama enforced the “Volcker Rule” to limit big banks’ speculative proprietary-trading activities. That’s about it, however. Even if you do not wish to diminish these modest changes, and I accept they are important in limited ways, you have to admit that the roaring financial crisis has produced a legislative mouse.
The banks that were too big to fail, have not been broken up into separate retail and casino businesses. They can still leverage deposits and call on the taxpayers to bail them out when the gambles fail. Bankers are still carrying on collecting bonuses whenever they can, even when the taxpayers have bailed them out. No one can say with confidence that the system has reformed itself.
The greatest failure to my mind does not lie in the loss of nerve that has produced such timid banking reforms, but in the refusal to challenge the secretive, hierarchical culture that imposed such calamitous costs on society. (And will do so again) The omission should surprise no one. Managerial censorship is so pervasive and so accepted that most people do not think of it as censorship at all. It seems as natural and as impossible to challenge as the weather. For all that, it is the only form of censorship you are likely to experience.
Nick Cohen
