It was a function of the geopolitical energy crisis. Inflation was not a democratic disease overcome by capital-friendly politics in the 1980s.

During the 1980s, legislation that made strikes more difficult passed in most western European democracies without causing anything like the political instability that should have been expected if, as the Trilateral Commission suggested, “the demands on democratic government” were growing “while the capacity of democratic government stagnates”. In class terms it was big business, in the US in particular, that had an interest in higher prices and pressed the case for them.įar from democracies being rendered ungovernable, the governments that came to office promising to reduce inflation, such as Margaret Thatcher’s in Britain, stayed in power. Indeed, Richard Nixon was never more popular in his first term than when he introduced a wage and price freeze in 1971. For the American political scientist Samuel Huntington, inflation was “the economic disease of democracies” since “it becomes difficult if not impossible for democratic governments to curtail spending, increase taxes, and control prices and wages”.īut this idea, that the majoritarian dynamics of democracies generate and then sustain inflation, is unpersuasive. The price and wage controls governments used to try to reduce inflation enjoyed widespread support, particularly among the working class and lower middle classes. In 1975, the Trilateral Commission – an influential forum established to convene politicians and business figures from North America, Europe and Japan to contemplate the future – published its report, The Crisis of Democracy. The authors believed that democracy’s fatal weakness was its propensity to cause inflation. It was as this geopolitical shift occurred that a belief took hold in some quarters that democracy had run its course. In this new geopolitical environment, the Middle Eastern states controlled the price and much of the supply of the primary energy source on which Western material life depended. From the 1970s, by contrast, Western democracies had to function in a world where for the first time no European country had an imperial presence in the Middle East and the United States had no capacity to export oil to Europe, even in an emergency. But the crises of the 1970s originated in a set of deep geopolitical changes, not the nature of democratic politics itself. In the mid 20th century, Western states and companies could largely control the international chains of production and transportation for oil.

Energy-driven inflation did cause Western democracies great difficulties during that decade. The pessimism of that decade, especially about the fate of democracy, lingers today.īut the 1970s are frequently misunderstood. Shortly before his resignation in May 1974, the West German chancellor Willy Brandt expressed his fear that western Europe’s democracies had only 20 or 30 years left before they would slide through chaos into dictatorships. It was a commonplace in the 1970s that after several decades of unprecedented stability Western democracies had entered a crisis.

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