The Challenge of Democracy

CY VON HERTZENGUSTAV f DemOCra ew The ChallengeOPean V IO – a eUr This book takes the measure of democracy by exploring the past, the present and the prospects of democratic societies, topics touched upon by Francis Fukuyama, Samuel Huntington, Amitai Etzioni, Fareed Zakaria among many others. The author’s extensive extramural experience sets the book apart from most academic treatises. Instead of focusing on a few aspects of contem- porary civilization, the author offers a catholic interpretation of the ways of the world, which subsumes previous attempts to understand the constraints and freedoms of our future. GUSTAV VON HERTZEN is one The future of humanity is as ever precarious, THE CHALLENGE OF DEMOCRACY of Finland’s grand old busi- dependent on our moral capital – a virtuous nessmen, a philosopher and an author; his main work is The circle of democratic values, institutions and Spirit of the Game (1993). He has practices. The voluntary cooperation between been married since 1952 to Ulla von Hertzen, née Wuoristo. They tens or hundreds of millions of basically egotis- have four children and twelve tical individuals in a democratic society is grandchildren. nothing short of the miraculous, and it should As chief executive of Cultor Inc., be no surprise that it does not always work. GUSTAV VON HERTZEN von Hertzen transformed a local sugar company into the leading Democracy has failed repeatedly outside its core food and feed producer in Finland. countries. When we move into the next phase of Meanwhile, Cultor created domi- democratic development, our worst enemy will nant niche positions internation- THE CHALLENGE ally by introducing innovative be complacency. technologies and products in nutrition and biotechnology. The Challenge of Democracy presents a pene- OF DEMOCRACY Gustav von Hertzen has served trating analysis of the democratic predicament on numerous company boards in Finland and abroad. As chairman – the historic ties, the driving forces, the threats he was instrumental in launching and opportunities. The personal recollections a singularly successful joint venture with major investments of the author enliven the text. He combines the in Russia and other countries of different aspects of his subject matter into a IT`s UP TO YOU the former Soviet Union. He has coherent worldview, mapping out the dangers also taken on many prominent commissions of trust. ahead. The book proffers both dependable charts ISBN 978-952-92-4856-8 and a moral compass for navigating a turbulent future. The outcome is in no way preordained, but depends on every one of us – our good will and sense of fair play. 9 789529 248568 Library of Congress Control Number: 2008910854 The Challenge of Democracy The Challenge of Democracy To Achieve a Global Plus-sum Game Gustav von Hertzen © Gustav von Hertzen Layout by Oy Nord Print Ab, Helsinki, Finland 2008 ISBN 978-952-92-4856-8 Library of Congress Control Number 2008910854 Preface This book takes the measure of democracy and reaches out to all con- cerned citizens. It is not an academic treatise with pretensions of sci- entifi c objectivity, but plainly mirrors the views of the author. The limited critical apparatus will refer to the most important sources and serve as an aid to further study. No attempt is made to cover the litera- ture in a systematic way. The only work I want to mention at this point is La Démocratie en Amérique, by Alexis de Tocqueville. It appeared in two volumes in 1835 and 1840, and was based on personal observations made dur- ing a voyage around the United States in 1831. The author had just reached the ripe age of 26 and was not burdened by the baggage of sci- entifi c merit. We may well ponder the fact that almost two centuries later we have been unable to signifi cantly increase our understanding of the essence of democracy. The subtitle of this book, To achieve a global plus-sum game, requires a short commentary. A society exists in order to produce added value for its members through fruitful cooperation. The internal rules of the game should therefore promote value-enhancing plus-sum games and minimize futile zero-sum play. Destructive minus-sum games should be totally unacceptable. By defi ning these interrelations in mathemati- cal terms, game theory becomes applicable and fundamental insights can be gained. The reader will, however, be spared formulae and deri- vations. The focus is on modern, large-scale democracies; historic and pre- historic precursors are discussed only in relation to the main theme. Neither have I tried to pin down a defi nition of democracy or to deal at length with the advantages and disadvantages of democratic government. The superiority of democracy is taken for granted. The in- terested reader is referred to an earlier work (The Spirit of the Game) where these questions are taken up in a broader context. The Spirit if the Game appeared in 1993 and carries the subtitle Navi- gational Aids for the Next Century. In the present book the aim is the same: to try to warn and to guide, to point at dangers and pitfalls while shedding light on resources and opportunities. Our challenge is to shape the future, without false presumption but with fi rm convic- tion. Contents Introduction 11 Part I The foundations of democracy 14 Chapter 1 Human nature 15 1.1 Nature or culture 15 1.2 Group evolution 19 1.3 The roots of morality 21 1.4 From generation to generation 24 1.5 The route to high culture 27 Chapter 2 The material base 32 2.1 Technical ingenuity 32 2.2 Commercial enterprise 36 2.3 The value of money 39 2.4 The formation of capital 42 2.5 The market economy 47 Chapter 3 Political foundations 52 3.1 The roots of democracy 52 3.2 The democratic breakthrough 56 3.3 Democracy in crisis 60 3.4 Democratic weakness and strength 63 3.5 Democratic self-organization 67 Chapter 4 The foundations of morality 71 4.1 Rational morality 71 4.2 Social capital 74 4.3 Freedom and human rights 78 4.4 Core values 82 4.5 Morality − the critical success factor 85 Chapter 5 Spiritual foundations 90 5.1 Faith in man 90 5.2 The so-called evil 93 5.3 Moral evolution 98 5.4 Science − an exemplary plus-sum game 102 5.5 The foundations of faith 106 Part II The practice of democracy 112 Chapter 6 Political zero-sum games 113 6.1 The party system 113 6.2 Administration and bureaucracy 117 6.3 Taxation and redistribution 121 6.4 Extra-parliamentary power games 125 6.5 The people in charge 129 Chapter 7 The economic plus-sum game 134 7.1 The national economy 134 7.2 Business economics 138 7.3 Natural resources and the environment 143 7.4 Human Capital 148 7.5 The global economy 152 Chapter 8 Law and justice 157 8.1 The price of security 157 8.2 The legal system 161 8.3 Crime and punishment 164 8.4 Social injustice 169 8.5 Global security and justice. 172 Chapter 9 The fourth estate 177 9.1 Good, bad and ugly 177 9.2 Control and self-control 181 9.3 Public opinion 185 9.4 Political correctness 188 9.5 Electronic communication 193 Chapter 10 Democratic fallacies 198 10.1 Phobias and hypochondria 198 10.2 Modern superstitions 202 10.3 Conspiracies everywhere 206 10.4 Gender ideology 209 10.5 In the doldrums 213 Part III The Future of Democracy 220 Chapter 11 The Lessons of history 221 11.1 The rise and fall of cultures 221 11.2 Stagnated high cultures 225 11.3 Aborted cultures 230 11.4 Democratic learning 233 11.5 The lessons of history 238 Chapter 12 Future perspectives 242 12.1 Complexity and self-organization 242 12.2 Energy supplies 247 12.3 Information and communication 251 12.4 The biotechnological revolution 255 12.5 Exploring the universe 259 Chapter 13 Threats galore 263 13.1 The comet cometh! 263 13.2 The climate and the environment 267 13.3 The menace of micro-organisms 271 13.4 Too many people? 275 13.5 Clashes of culture 280 Chapter 14 The mission of democracy 284 14.1 Consolidating the core 284 14.2 Major Powers in waiting 289 14.3 Rogue and failed states 293 14.4 Global governance 298 14.5 A diverse humanity 302 Chapter 15 The moral challenge 308 15.1 The faithful servant 308 15.2 Value generation and re-generation 312 15.3 Moral capital 317 15.4 Global values 321 15.5 Play a plus-sum game! 325 Acknowledgements 331 Notes 332 Bibliography 351 Index 360 Introduction The history of mankind can be perceived as an extended tutorial in plus-sum games, slowly learning the art of productive cooperation between individuals, groups, tribes and recently even nations. Construc- tive collaboration always requires a certain amount of trust, which implies a moral foundation. As communities grow, so too does the scope for free-riders, and cheating tends to proliferate. A correspond- ing increase in moral resources becomes imperative in order to uphold voluntary, democratic cooperation. The alternative is an autocratic, even totalitarian society. Lately, the democracies have gone from strength to strength, politi- cally as well as economically. Today, we regard democratic societies as self-evidently superior, which may well be right. But we are laboring under a dangerous delusion when such self-conceit leads to presump- tions about the fi nal supremacy of democratic countries. Democracy is not only the best − or the least bad − mode of government, but also the most demanding.

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