Democracy vs Growth

Nick Henderson
economistsofthefuture
4 min readAug 7, 2019

From this webpage you could, in a few clicks and a short waiting period, download an internet browser from which you could buy drugs, firearms and all manner of illegal goods and services. If you’re looking to simply access illegal material of any description, then your task is even easier. The deep web is the portion of the information iceberg that remains underwater. It’s enormous. And, for governments of all shapes and sizes worldwide, it’s near-impossible to regulate.

In 2016, the FBI took Apple to court in California, attempting to compel the company to provide them the means to unlock an iPhone recovered from the perpetrator of a terrorist attack the previous year. Apple refused, stating that it required the creation of a software that would compromise the security of their customers. In a statement, Apple CEO Tim Cook said “The U.S. government has asked us for something we simply do not have, and something we consider too dangerous to create.”[1]

The next month, the FBI dropped their request. They had hacked the phone anyway.

Your ability to buy cocaine on the deep web and the FBI’s ability to hack a terrorist’s phone represent both sides of the same coin. Technological innovation is occurring at a speed that has never been seen before, and every new year possibilities that were akin to fantasy a decade ago open up on the internet alone. Add to this innovations in artificial intelligence, revolutions in 3D printing and new methods of food production, and we’re living in a brave new world indeed.

So what? Growth is good. Innovation is the cornerstone of increases in quality of life. It’s both a necessary condition and natural byproduct of a capitalist economy. Yet when we say growth is good, what we really mean is that manageable, incremental, sustainable growth is good.

In Australia, we’re lucky enough to have evolved some of the best democratic institutions in the world. Yet these institutions have their roots in the pre-information age. They formed when the rate of technological progress was slow, when politicians could pre-empt societal upheaval with legislation, and voters could do so by altering their preferences. With technological progress not just continuing, but accelerating, its burden on our existing political structures also increases.[2] And when this hyper-powerful, unregulated technology is accessed by the wrong person at the wrong time, we may have ourselves a big problem.

Unrestricted access to fairytale technology for the average citizen will provide the means to innovate, and to perpetuate future growth. Yet access for the average citizen also means access for the disturbed youth in his shed, who can build and detonate a homemade bomb before his mum even has time to ask what the smell is. It means that extremists on all sides will have the means to cause serious societal damage, and turn our liberal democracy into an intra- or international arms race.

And as far as governments are concerned, we have seen the ability of a number of post-cold war democracies to successfully revert to essentially authoritarian rule. Think Turkey, Russia, Hungary, Poland, and Venezuela, to name a few. Extend this to the US and Western Europe if you’re feeling bold. Whether it’s shoring up political support through blackmail, tampering with election results at home and abroad, or simply by gathering massive amounts of data on the behaviour of citizens, technological developments are being weaponised to convert successful democracies into effective dictatorships.

The question this article is asking is simple: what happens when our technological innovations outpace our ability to regulate them effectively? While most innovation to date has been fantastic in the improvement and ease it has bought to many aspects of modern life, it would be foolish not to exercise caution. Effective regulation and oversight is needed, both of giant tech companies and startups searching for their first patent. Government needs to hold hands with inventors so as to prevent legislation from falling behind present reality. This is a road that is already being walked by NGOs such as the National Democratic Institute.[3]

Conversely, political power must be widespread enough that no one individual in office can appropriate the technology for their own dubious goals. For this, we need to fiercely preserve, and perhaps strengthen, all the mainstays of a solid liberal democracy — the separation of powers, rule of law, entrenched property rights, and perhaps most importantly of all: a strong, noisy and impartial media.

Governments have the joint responsibility to stay on top of technological advances for the sake of stability and security, while resisting the urge to weaponise them for short-term political gain. Liberal democracy itself is an innovation belonging to the previous millennium, and it has become increasingly fragile in our new era of breakneck technological growth. Yet it is the best form of government we have; that we have ever had. Let’s protect it, upgrade it, and not take it for granted, such that it can travel with us through the twenty-first century.

[1] Tanfani, J. (2018, March 27). Race to unlock San Bernardino shooter’s iPhone was delayed by poor FBI communication, report finds. Los Angeles Times. Retrieved from https://www.latimes.com/

[2] Roser, M., Ritchie, H. (2019). Technological Progress. Our World In Data. Retrieved from https://ourworldindata.org/

[3] National Democratice Institute. (2018). Technology is transforming democracy. Retrieved from https://www.ndi.org/

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