The Problem with Democracy

Have you tried turning off the democracy & turning it back on again?

Today, the US population is voting as it has done, unbroken, every four years through civil war, economic depression, and global conflict since the depth of winter in 1788, when it elected George Washington with 100% of the vote (still sounds dodgy today, but that’s another story…)

But it’s easy to confuse democracy with elections as Yuval Noah Harari points out in his new book Nexus. After all, plenty of authoritarian states like Russia, Iran and China have elections. North Korea even has compulsory voting like Australia.

Why do they bother?

The desire to cosplay democracy in these states is simple: Real democratic states possess the ultimate standard in legitimacy; the right to govern in the collective interest. No wonder Putin & Kim Jong at least pretend to be accountable.

But real democracies have a process that allows for dialogue and criticism between elections that is the actual secret sauce. Elections are just the show biz part of an otherwise messy process where democracies do what authoritarians can’t do.

They self-correct.

Not all the time and not even efficiently, but the very ability to self-correct is what sets them apart over the longer term. That may not seem like comfort right now but it should be.

The ability to change our story from time to time without violence is both an innovation and a bulwark against tyranny. Notice I didn’t say a ‘guarantee against’ because it was a democratic process that installed Hitler. That terrible failure though was less an argument against democracy as it was an argument against economic degradation so bad that it led to Hitler looking like a solution.

You can’t deprive a people economically for too long without them becoming degraded civically.

China is currently in a unique phase. Highly competent technocrats are in charge both centrally and regionally but if this falters in a crisis or becomes more corrupt than it already is, there is no ability for Chinese citizens to change it without violent upheaval.

Embarrassingly, the Chinese communist police state has been responsible for almost all of those much lauded numbers of people pulled out of poverty by capitalism over the last 40 years accounting for approximately three-quarters of the global reduction in extreme poverty during this period. (World Bank)

And as the last decade has shown, a system of analogue voting every 4 years has not proven to be, on its own, an obvious improvement on authoritarian China in terms of political stability.

Despite the hyperventilating rhetoric of a totalitarian takeover by either ‘woke capital’ or ‘Trumpian facism’ (depending on your politics), tonight’s US elections will not be the end of democracy.

And yet, somehow it feels like we are getting towards the end of this particular rope.

We’ve all felt it—that nagging sense that something’s off with how we’re governing ourselves. And let’s be real, we’re not just talking about the usual frustrations with bureaucracy or politicians; this is deeper. Democracy, the system we’ve celebrated as the pinnacle of freedom and fairness, is showing its age. Around the world, cracks are appearing in the democratic model, and the question looms: Is democracy actually the best we can do? Or have we outgrown it?

The analogue, enlightened gentleman of the 1700’s version of democracy we’re familiar with, aka as representative democracy, is under strain. It’s getting stretched, twisted, and pulled apart by forces it wasn’t designed to withstand—like extreme inequality, AI enabled tech surveillance that officers of the Stasi would have had wet dreams about and a speed of technological change in all areas that those same representatives cannot possibly keep up with.

The rise of cryptocurrencies, particularly Bitcoin, might challenge the control that democratic and open nation-states have over their own currencies. If Bitcoin and similar technologies succeed in creating a user-friendly ecosystem for everyday transactions, (something that even Michael Saylor is skeptical of) they could disrupt open governments’ ability to maintain a stable, unified monetary system within their borders—something essential for supporting a healthy democratic economy.

Could the reponse to these challenges mean we end up looking less like the liberal democracies of today and more like China’s centralised, technocratic, top-down model?

But before you hit the panic button, take a breath and look at some of the fascinating alternatives that people around the world are exploring. Think of this as a democratic remix—new ideas that could be part of democracy’s next evolution, if it has one.

Reinvention is after all, the one rabbit that democracies keep pulling out of the hat.

Instead of picturing a big country like the US or a traditional one like the UK changing to any of the following options, imagine the emergence of new digital native democracies that might operate within or between nation states.

Local councils, NGOs, DAOs (decentralised automomous organisations) and perhaps new Network States as posited by Balaji Srinivasan that may give rise to the world’s first truly universal, online citizens.

But let’s start with what exists now.

Estonia’s Digital Democracy: Streamlined and Transparent?

Estonia’s taken what feels like a sneak peek into the future of governance. After reclaiming independence in 1991, they set out to create a government that could function in the digital age. Now, Estonians can vote, pay taxes, and even start businesses online. They’ve got a digital ID, which gives them access to nearly every government service you can imagine, all from the comfort of their couch. And they didn’t stop there; Estonia opened up its digital doors to the world with an “e-Residency” program that lets non-residents access some business services too.

Here’s what’s appealing about this model: transparency and efficiency. It cuts down on bureaucracy, reduces the potential for corruption, and lets people actually see how decisions are made and money is spent. But then come the obvious pitfalls: cybersecurity risks, privacy concerns, and the old nemesis of the digital divide. In a country as small and tech-savvy as Estonia, these challenges are tough but manageable. Scale it up, though, and things get trickier.

If bigger democracies could pull it off, a digital-first model could mean a lot more than just online voting; it could mean that citizens have a real-time say in governance and an unprecedented level of transparency. But that’s a big “if,” and not every country has Estonia’s track record of making it work.

Futarchy: Letting Markets Decide?

Here’s a head-scratcher of an idea: what if we let markets decide the policies that would best achieve our goals? It sounds far out, but economist Robin Hanson believes it might work. In Futarchy, citizens would vote on broad goals—think “reduce poverty” or “raise life expectancy”—and then let prediction markets determine the best policies to get there. It’s a way to make democracy more data-driven, more empirical.

The appeal? Accountability and results-oriented governance. Theoretically, prediction markets would remove some of the ideological battles by focusing on what actually works. But the downsides are hard to ignore. Relying on markets opens the door for manipulation by those with money to burn. And even if markets can predict economic trends, can they capture the complexities of social policies and human values?

Futarchy might work well for, say, adjusting economic policy, but it’s hard to imagine it capturing the full scope of what society needs. Yet, it raises a good question: could data and markets, in the right hands, help us get closer to real solutions?

Not one I particularly like given the likelihood of decision making capture by those with loads of cash but thought it was an interesting one to be aware of.

Sortition: Governance by Lottery?

Maybe you’re familiar with Sortition, or maybe the term sounds like something from ancient Greece. In a way, it is: it means selecting officials randomly, rather than by popular vote. The idea is simple but revolutionary. If we randomly select citizens for government roles, we could get a governing body that’s more reflective of society as a whole. Imagine a government that looks like a cross-section of real people, not just career politicians.

Sortition’s biggest selling point is authentic representation. If we pulled random people in, we’d likely get a mix of viewpoints and backgrounds that better mirrors the real world. Plus, it could break the cycle of career politicians and the influence of big money in politics. But the risks are clear: competency and accountability. Not everyone has the expertise to handle high-stakes decisions, and without the threat of re-election, there’s a real question of how to ensure they’d act in the public interest.

Given that we allow juries to be selected the same way and they often make decisions that profoundly affect the lives of other citizens, we are more familiar with the concept of Sortition than we think.

For those who think politicians are the problem, Sortition feels like a breath of fresh air. But without careful safeguards, it could end up with some pretty chaotic results.

Liquid Democracy: Direct Democracy with a Twist

Liquid Democracy tries to split the difference between direct and representative democracy. Here’s how it works: you vote directly on some issues, but for others, you can delegate your vote to someone you trust who knows the topic well as your proxy.

It’s flexible, it’s participatory, and in theory, it puts more power in the hands of ordinary citizens without losing the benefit of expertise.

What’s appealing here is the balance between flexibility and representation. If you’re passionate about environmental policy, you can vote directly on those issues. But if foreign policy’s not your thing, you can hand your vote over to someone who understands it better. It’s the best of both worlds—or at least, that’s the promise.

But then there’s the potential for abuse. If a few well-known voices end up with most of the delegated votes, we’re back to a concentration of power. And with people constantly switching their delegations, tracking votes and accountability could get messy. It’s a model that requires tech to manage well and might face a similar fate as Estonia’s digital democracy—viable for some, but logistically challenging at a large scale.

A common guard rail suggestion is to limit the number of proxies that any single person can hold may solve the biggest objection to this otherwise dynamic concept.

The one great strength of liquid democracy is that it breaks the illusion of the sanctity of the majority. It also breaks up the need to make a bloc of decisions together in the name of some political faction or another. Abortion or economics or defence spending considerations can be considered separately and dynamically rather than hoping for the least worst alignment that exists currently in representative democracy via political parties.

Taiwan’s vTaiwan: Online Deliberation in Action

And then there’s Taiwan. With their vTaiwan platform, they’re trying something that feels genuinely democratic and modern: crowdsourcing governance. Since 2014, vTaiwan has enabled citizens, experts, and officials to openly discuss and collaborate on policy. Through both online and offline forums, they work together to build consensus on complicated issues, like how to regulate ride-sharing companies or draft financial technology policies. It’s a model of collaborative, inclusive governance.

Taiwan’s platform stands out because it’s not just about voting; it’s about deliberation. People come together to discuss issues, share perspectives, and build understanding. vTaiwan’s biggest success is in how it has tackled thorny issues that would normally be divisive by creating an environment where people feel heard.

But the challenges remain. Scalability is an issue, and so is digital literacy. You need a certain level of tech skill to participate effectively, which means that for now, it works best in smaller, more digitally literate populations.

Have We Reached Peak Democracy?

So, where does this leave us? Are we witnessing the slow fade of traditional democracy, or is this just the beginning of a new chapter? The world is pushing democracy to evolve. Whether it’s digital systems, market-driven policy, citizen lotteries, hybrid models, or online deliberation, each of these alternatives scratches at a different itch in the democratic experience.

Have we hit peak democracy? It’s tempting to say yes. But maybe what we’re seeing is democracy growing up, forced to reckon with the messiness of a complex, hyper-connected world. The path forward likely isn’t a one-size-fits-all solution. Maybe Estonia’s model works in smaller, tech-savvy nations. Maybe Futarchy has a place in economic policy. Sortition could improve representation on local councils, while Liquid Democracy and platforms like vTaiwan enable participation at a national or even global scale.

In the end, the future of democracy isn’t something governments will dictate; it’s something we all shape through our choices, our questions, and our willingness to explore new ways of living together. And unlike China, Russia or North Korea, we always get to write the next chapter.