But ongoing changes are much scarier than the above graph. Because not only are most countries getting less democratic, but oligarchic regimes are developing much faster than democracies.
Last year, Pierre Fortin analyzed Canada’s productivity stall, mostly blaming immigration:
In 2018, Hans Rosling already noted that “Most countries that make great economic and social progress are not democracies.”1
This August, The Wall Street Journal’s Europe Is Losing article2
pointed out slow progress since 2009, 2005 and even 2000. During that time, Europe has considerably slowed its participation in environmental disruption, but not as much as the USA:
As if the above was not enough, Japan’s productivity has not increased for more than a decade:
This stall may largely be caused by its aging population.
Meanwhile, the country which used to be the largest democracy is breaking down.
Russia’s invasion must be a wake-up call. The fall of communism was last millennium. Europe is losing for sure, but for more than a decade, democracy has been losing―by every measure:
The title of the V-Dem Institute’s 2025 Democracy Report is bleak: 25 Years of Autocratization – Democracy Trumped?
Looking forward: slowing down oligarchization
The ongoing oligarchic productivity catch-up largely results from diffusion of technologies from democracies. In particular in oligarchies which do not respect democratic IP, and even more in those which steal it. Our first measure should be to take technology seriously, securing our infrastructure and reacting to espionage (not by encouraging it, but by preventing its spread). A second measure could be to sanction state-sponsored espionage, perhaps with widespread import taxes on technology from rogue states, so that democracies avoid purchasing technological goods and services from China and others just because theft made them cheaper. Levying such tariffs would unfortunately have to be quite approximative (since even our awareness of industrial espionage is highly incomplete), but it would reward research rather than espionage.
In his article “The EU-US productivity gap and Europe's hidden strength”, reporter Peder Schaefer points out that Europe’s sub-performance mostly comes from technology:
Technology is easier to adopt then discover; oligarchy’s ability to catch up does not imply being able to then take the lead. But corporations which produce technology are particularly global and mobile; they will largely decide where to locate their R&D based on the cheapest cost. With corporate tax rates at 25% or above in all major European states, Europe is struggling to compete with the USA and the rest of the world. As The WSJ writes, Europe’s extreme focus on short-term (personal) welfare is long-established, but its aging population is making matters unsustainable, with governmental spending on elders and health exceeding a fifth of GDP in most major European countries.
Democracy is getting old―a sure sign of its success, but also of its increasing fragility. If it wants to stay on top of technology, it needs to age wisely. When under attack, seeking balance over ideals is even more vital.
Nobody considers Athenian democracy as a reference; let us be humble enough to recognize that what we call democracy today is hundreds of years old and possibly just as flawed. By clinging to our obsolete ways and by attacking our allies, we are letting our orgueil and delusions precipitate us back into oligarchy.
Democracy is losing manufacturing, technology and ground; let us hope it has not lost its ability to renew itself.
Updates
- Thanks to B.-N. Houdet-Côté’s comment, I found Noah Smith’s remarkably insightful article Manufacturing is a war now, which not only supports that we are losing manufacturing, but provides an extra element explaining Europe’s loss (confirming the role of autocratic IP disrespect). I can only hope the article is not as prescient as it seems to be so far!
Its subtitle? And the democracies are losing.
I did not base this post’s title on that article, yet I am afraid the similarity is no coincidence.😰 - The threat facing Canada cannot be met with pipelines. We must do this instead (Toronto Star)
- The China Has Overtaken America article published a few days before this one puts it even more bluntly, calling it “a reverse Sputnik moment”.
Paul Krugman wrote:Does this mean that the U.S. is losing the race with China for global leadership? No, I think that race is essentially over. Even if Trump and his team of saboteurs lose power in 2028, everything I see says that by then America will have fallen so far behind that it’s unlikely that we will ever catch up. - China-Netherlands Chip Fight Turns Into Corporate Civil War
- China's Dual Squeeze on European Industry Intensifies:
Germany's trade deficit with China hit $76.52 billion last year and is expected to surge to around $100.87 billion this year, The Economist reported, driven by collapsing German exports and a rush of imports in categories like cars, chemicals, and machinery that were once German specialties. - China leads research in 90% of crucial technologies — a dramatic shift this century
- Why Europe doesn’t have a Tesla puts the onus not only on governmental spending, but also on overregulation of labor, making innovation excessively costly.