Liberalism, A Crisis From Within, Not From Without

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What Happened to Liberal Democracy?

Budapest, Hungary, 1989. Viktor Orban, a 26-year-old dissident at the time, demanded the withdrawal of Soviet troops and free elections at the reburial ceremony of revolutionary leaders. That same year, Francis Fukuyama declared ‘the end of history,’ signifying the final victory of liberal democracy. However, after later becoming prime minister, Orban established himself as a symbol of right-wing populism and came to be called ‘the Trump of Europe’.

Nobel Prize in Economics laureate Daron Acemoglu (Daron Acemoglu) begins <What Happened to Liberal Democracy> with the story of the ‘two Orbans’. Having examined the conditions under which national prosperity·freedom take shape in <Why States Fail> and <The Narrow Corridor>, in this book he asks how liberal democracy, once ascendant, fell into crisis. From deindustrialization and inequality to populism and culture wars, social media and artificial intelligence (AI), he threads together the changes since the 1970s into a narrative of the rise and fall of liberal democracy.

His core diagnosis is that liberalism lost its balance from within. Liberalism, which had expanded freedom by checking power, became the established order and then failed to respond to the shocks of globalization and digital technologies. It failed to keep its promise of ‘shared prosperity’ in distributing the fruits of growth, and the elite-centered camp of progressive liberalism placed greater weight on identity and cultural issues, drifting away from the working class. Populism exploited that opening. The remedy is ‘working-class liberalism’. The proposal is to preserve basic rights and checks on power while redirecting the center of politics to the lives of the working class. It argues for reviving good jobs and growth, strengthening community self-governance and public services, and steering AI to develop in ways that enhance workers' capabilities and productivity rather than replace them.

The diagnosis itself is not new. Since Trump's rise, self-criticism has been raised that the liberal camp drifted from the working class and tilted toward identity politics. This book weaves scattered problems into a single current to identify the structure of liberal democracy's crisis. However, how to restore solidarity with the working class in real-world politics remains an open task.