Rising inequality and declining living standards have posed a threat to democracy in several democracies, but so far not in Australia. However, the increasing inequality of wealth, driven by housing becoming unaffordable without rich parents, is a threat.

A repost from 8 October 2025

The requirements for democracy

Democracies perform best when the electorate is not polarised. This occurs when electors are largely in agreement, and any differences of view are not fundamental. Then when a party loses an election, its supporters can readily accept the result because they don’t expect that their critical interests will be challenged.

For most electors, at least until recently, this was the only world we have known. The last major challenge to democracy occurred almost 100 years ago during the Great Depression which led to the emergence of far-right-wing fascist governments in several European countries.

But following the democracies’ victory in World War II, the common experience of hardship during the Depression and the War led to the development of the welfare state based on an acceptance of our common responsibilities for each other.

There was general acknowledgement that we must all look after the well-being of our fellow citizens when they are challenged by misfortune through no fault of their own. Further, our economy and our society gain when everyone is provided with the opportunities to realise their potential.

The counterpart was stable systems of government with not a lot of political disagreement, or at least not on major matters.

In recent years, however, in many developed OECD economies that common agreement based on a shared experience is no longer the case. Politics has become more divided, with new parties emerging to challenge the traditional two-party political divide between labour and capital.

Most of these new parties reflect what is sometimes called “identity politics”, such as the Greens and Teals in Australia. However, these parties can typically negotiate agreed policy positions with a major party to allow the formation of a stable government.

In contrast, most recently, the emergence of a populist right-wing movement in many developed countries does represent a much more significant challenge to our traditional democracies and their previously agreed policy responsibilities.

So far the US, under Donald Trump, is the only country where populism has triumphed. Trump is ruling by decree, bypassing the normal democratic checks and balances, to introduce his MAGA agenda based on tariffs, stopping migration and reversing any action to reduce the threat of climate........

© Pearls and Irritations