Front Burner - Can liberal democracy be saved?

Episode Date: April 21, 2026

Jayme sits down with Nobel laureate economist, Daron Acemoglu, a professor at MIT, and one of the leading thinkers about labour, politics and technology. He’s the author of the best-selling book “Why Nations Fail” and the forthcoming work “What Happened to Liberal Democracy?”. They talk about the decline of western liberal democracy, the alienation of the working class, AI, and more.This was a live conversation at a summit put on by OCAD and Toronto Metropolitan University called the Democracy Xchange.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

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CA to make sure your big deal is the best deal. That's C-A-G-U-R-U-R-U-S.C-A. This is a CBC podcast. Hey, everyone, it's Jamie. This weekend I was invited to have a conversation with Nobel laureate economist Daron Asamoglu. Asamoglu is a professor at MIT and one of the leading thinkers about labor, politics, and technology.

His big best-selling book is Why Nations Fail. On Saturday at this summit put on by O-CAD and Toronto Metropolitan University called the Democracy Exchange, we talked about his upcoming book, What Happened to Liberal Democracy, and had a really great discussion about the decline of, well, democracy, but also about the alienation of the working class, AI, and a lot more. Have a listen. Well, I cannot think of a better way to spend a Saturday morning than with so much for being here and for making the trip to Toronto. My pleasure. Thanks, Jamie. It's great to be with people who care about democracy and our future.

A treat for all of us here. I know. We are, of course, sitting down to chat right now during an incredibly turbulent time in the world. There are several active global conflicts at the moment. Perhaps most half of mind for people is what has been happening in the Middle East. And given that we're going to be talking about the decline of liberal democracy today, I just want to root this conference. conversation in this moment in our current circumstances. And how do you see this conflict and the ripple effects of it shaping our political landscape four years to come? Well, I think there are so many things we could talk about about the conflict, but the most important points I would like to make about it is that this is just a blunder.

It's Trump's war. It's a blunder in the way that it was conceived. It was, it's a blunder in the way that it was, waged and sure, medium-run economic effects, high oil prices, greater uncertainty, destability, but I think it's also a low point of U.S. power around the world. The ledger for American hegemony is decidedly mixed, but the best part of it was soft power, which is that the U.S., even if it did not, always practice it preached certain values, including democracy around the world, including some

amount of global cooperation, except, of course, when it did not suit it. But, you know, we have now completely abandoned that. This is such a cynical war, and it's also justified in such cynical manner, and it's been mismanaged in every aspect. So this is really embarrassing. In addition to arguing the decline of America's saw power around the world, I've, I've I've also seen you talk about how Donald Trump is destroying the American economic engine. One of your books, of course, as we've just heard, as many people have probably read in this room, is why nations fail. I think you're going to say America is failing, but the question I have for you is how irreversibly? I don't know how irreversible it is, but it is definitely failing institutionally.

and some of those effects are going to be hard to reverse. Every institution depends on norms and expectations of behavior. One of the secret sources of the American experiment with democracy was that people thought it was invincible, that the constitution had gone on for almost 250 years, and it created a framework in which there were strong forces for moderation, control of politicians, separation of power, all of that is now out of the window.

That conceit is completely gone. Of course, the fragilities were there, but Donald Trump is going to track through it. And if the next president or if the next secretary of the treasury wants to engage in corrupt practices, we can no longer say, ah, well, the norms will prevent it, and there will be people within their own administration who will stand up against them, because Trump has shown how to manipulate these things,

both by his norm-breaking behavior and via his appointments of completely unqualified, but loyal and generally lacking in moral people around high office positions. So I think that's a template that many people are going to emulate. So I actually think that the next democratic president is going to behave much worse than he or she would have done otherwise, because once you centralize powers and remove all these checks, the next person, sometimes thinking that they are actually virtuous,

will also exploit them. And that's terrible. Regardless a party. Regardless of party, regardless of agenda. And that's, I think, Biden's downfall. The reason why Donald Trump is in office today is because Biden's presidency was a failure, and Biden's presidency was a failure,

partly because of the polarization that Trump had created, and partly because Biden thought that he could, for mostly internal Democratic Party reasons, try to rule in a way that did not really respect the processes of American government, including via multiples of executive orders and without enough consultation, and all of these things are going to get multiplied. What do you think this all means for a country like Canada? that your neighbors to the north, what are the risks? I guess also what are the opportunities, if you see any?

I think the biggest risk is Canada becoming a state of the United States. No, I'm kidding. We are pretty alive to that. Right. Well, you know, please stay away. Save yourself when you can. I think we would like to. Look, obviously Canadian economy is very,

intimately linked with the American one, and going back to your earlier question, Trump's presidency, and to some extent, actually before him, Biden's presidency, have amplified the fragilities of American economic engine. There are many dimensions in which this is happening. One of them is that competition is critical for any kind of economic growth, but especially for the American style of economic growth. Competition is down in every sector in the United States, and most importantly in tech, which has been an engine of economic growth. One thing that people couldn't imagine before in the United States

was that the government would favor some companies strongly such that their competitors would be crushed. That's the reason why thousands or tens of thousands of people started very successful companies in their garages because they thought, well, if I have a better idea, I will be able to pursue it, I'll be able to get financing for it, I'll be able to get the government contracts, I'll be able to outsell very big established companies

and nobody doubted that possibility. Now you should because Trump is showing how, his administration will favor some companies and do their bidding. And again, this might be repeated by future administrations. And the greatest fragility of all is that American economic growth right now is really being driven by AI investments, and the AI sector has a lot of weaknesses and fragilities. None of those companies have come up with a monetization model that could even generate a fraction of the profits that they would need to make sense of the massive investments.

Some of them are saying, oh, well, just wait, general intelligence and everything will be fine, and in the meantime, they're losing tens of billions of dollars. So there are a lot of fragilities in there, and if the American economy tanks, I don't think it's going to be great for the Canadian economy. Your latest book is what happened to liberal democracy.

what happens to liberal democracy? Oh, please don't get me started. Well, look, I wrote the book because I believe that liberal democracy isn't just the best model. It doesn't even have a rival. So all of the authoritarian alternatives that are being bandied around right now,

all of the traditionalist government systems that were tried before, have been failures for the things that the majority of the people care about, what liberal democracy pledged, and for over seven decades is shared prosperity, economic growth, not stagnation, not just staying where we are, but economic progress. That is shared, from which every social group,

every demographic group takes its share. public services. If you look at not just 19th century, even like the first half of the 20th century, in much of the world, including the United States and all of Europe, poor people, working class neighborhoods, had access to none of the most basic public services, infrastructure, working sewage systems, indoor toilets,

decent education, health care. All of these are the agenda of liberal democracy that was satisfied. And most importantly, of course, it's raison d'est, voice. People participated in government. So, liberal democracy delivered on all of these. But it also failed to adjust to the digital age, where inequalities multiplied and new divisions within society emerged, most importantly between the educated and the less educated.

And that was accompanied in every Western advanced economy by a divergence in how people socialize, how people marry, where people live, what their social values are. And in all of these societies, with a few variations, the educated increased their social status, they increased their social power, and they took also control of the... the beating heart of liberal democracy,

center-left parties. Center-left parties, like the Labor Party in Britain, social-democratic parties in many parts of Europe, the Democratic Party used to be working-class parties. They had people who came from blue-color jobs, who were in leadership positions. They got the majority of their votes from the

working classes. That started changing in country-after-country in the late-1970s, early 1980s, and most comprehensively in the 1990s. Now, all center-left parties are essentially educated, elite parties. The more education you have, the more you vote for these parties, and the more important you are in the decision-making of these parties. And you know what did these parties do? They turn their back on working classes, both in terms

of their cultural priorities and their economic priorities. And they presided over a huge increase in inequality, slow down of wage growth, slowdown of creation of good jobs. And they didn't bat an eye. Instead, they tried to sort of impose the values and priorities of their most vocal, educated members onto communities that were more traditional, more religious, had more diverse values, and that's what we need to sort of reverse. So in other words, liberal democracy needs to be created, recreated, as something that's much more committed to shared prosperity, to good jobs, employment, creation. Okay, good luck doing that in the age of AI. can talk about that, and also pull back from the cultural agenda and be much more embracing

of the diversity of the cultural values of both native-born and ethnically diverse working-class communities. I wonder if you can give me just some concrete examples of how you think they did that. How do you think they did that in the past of being more congruent with that or in the present? In the present. I think they're not speaking to working class people. Yeah, I mean, I think in terms of economic policy in the United States, for example,

the Democratic Party took a big transformation in the late to mid-70s, and that was a process that essentially took the economic priorities of the Democratic Party quite far from the working class priorities. If you look at surveys, you see that people, say, from low education or blue-color occupations, have very consistent preferences in terms of economic policy. They want jobs, they want minimum wages, they want unions, they want controls over cheap imports from other countries. They want job programs.

These were the kinds of policies that the Democratic Party doubled in. There were many democratic politicians, some of them from the South, some of them from the Midwest, that espoused these values, and for example, the minimum wage was high by international standards in the United States. Starting with the Atari Democrats, they said, no, no, no, these are retrograde policies. We care about inequality, but the way we're going to do that is via tax and transfer programs, which, of course, they didn't.

But both the tools and the rhetoric changed, and at the same time, sort of cultural policies started gaining much more priority. Some of this cultural divide, of course, is manufactured, is manufactured by right-wing entrepreneurs, but its grain of truth cannot be denied, which is that the more educated cosmopolitan, especially metropolitan-based activists of center-left parties

in the United States and in other parts are much more cosmopolitan in outlook. They care more about disadvantaged groups than traditional groups. They are less religious. They have very different values on issues such as immigration. And those values, many of them, I agree with. But you cannot impose them, and you certainly cannot impose them on communities. And the moment you start doing that, both you have given up on the most important tenets of liberalism.

And also you're going to create backlash, which is exactly what happened. Shopping for a car should be exciting, not exhausting. But sometimes it can feel like a maze. That's where Car Gurus comes in. They have advanced search tools, unbiased deal ratings, and price history. So you know a great deal when you see one. It's no wonder Car Gurus is the number one rated car shopping app in Canada on the Apple app and Google Play Store. Buy your next car today with Car Gurus at Cargoos.ca.

Go to Cargoos.com. to make sure your big deal is the best deal. That's C-A-R-G-U-R-U-S.C-A. Car gurus.ca. The Powering Politics Podcast is available six times a week, but you might not be. If you want to catch up on what happened this week in politics,

join me, Laura Dangelow and some of Canada's most tuned-in political strategists to break down the week that was. Short on time, the weekly wrap has you covered with a new episode every Saturday. This working-class liberalism that you advocate for. Are there any examples from the world today that you think exemplifies it?

Today, no. No. But go back to the first half of the 20th century, and social democratic parties in Scandinavia or the Labor Party at times is exactly what they were working class liberalism is the current diversion of that. But they had many things going for them that we don't have today. That's why working class liberalism is much harder, and that's why I don't just call it social democracy. First of all, Scandinavian countries, Sweden, Denmark, Norway, they were amazingly innovative in terms of their policies, in terms of how they built coalitions. But they were doing that in a relatively homogeneous country. So the ethnic cultural divides that exist today are much harder.

So when the social democrats spoke about really representing workers, Workers believed them because they were culturally congruent, they were embedded in the trade union movement, they had already been fighting for worker wages and other things for quite a while. Same thing for the Labor Party. We have to recreate that kind of success and that kind of organic tie to working people in this more divided age. Where does someone like Zoran Mondadi fit into this conversation for you?

Do you think he's doing any of that? Yes, he's doing some of that. I think, first of all, he's charismatic. That's wonderful. He has shown a great knack for going and talking to people, which is wonderful, and that's very, very important. You know, I'm a big believer that all politics starts local and should start local, because if you want people to be engaged in self-government,

they're not going to be able, you know, if you're a French citizen, you're not going to have much of a voice in how the European Commission is run, but you can have a lot more voice about how your neighborhood is run. So local politics is very important, and he's showing great skills in being an active listening local politician. And he has prioritized affordability and economic issues which are great. On the other hand, he is in the milieu of the Democratic Party that is very, very distant to the cultural priorities of most working class families. and that's the bridge that has to be crossed at some point. So if he is perceived by working-class neighborhoods

as he's a classic democratic socialist that is going to impose on us cosmopolitan values and is going to prioritize immigrants over domestic neighborhoods and he's going to prioritize, you know, transgender values rather than what we care about in our neighborhood, Republicans are, again, going to be able to divide the working-class vote in a major way. So that's the sort of the transition. So we'll see where Mamdani goes over and see where other local politicians

that are showing success and determination within the Democratic Party. I think my hope for working-class liberalism always starts at the local. level. I saw this week he slapped a luxury tax on you know, pent house, you know, luxury homes and he's opening up these publicly funded grocery stores moving ahead with that. Do you like those policies? I think the luxury tax is a good idea at this point because there's so much inequality in New York and there is a big budget gap.

Whether publicly funded grocery stores are a good way of doing that or whether there are other ways of doing affordability better remains to be seen. I think more spending that takes the form of subsidies creates a lot of risks. At the end of the day, my belief is that there's only one way to create shared prosperity, and that's wage and employment growth. Everything else has to be at the service of that and around that. There will be people who don't get jobs. there are always disadvantaged people.

So that's why creating jobs and creating good jobs is essential. Let's shift to AI. I think we have about 10 minutes left. Oh, this is a small topic. We can handle that. We'll just do AI in 10 minutes. I see my friend Marad is here,

so you can maybe ask any eye question. Just keep going after this. Okay, so we talked about Elon Musk, but Peter Thiel, Larry Ellison. I mean, these are people who are some of the prominent backers of mega. Even Jeff Bezos, Mark Zuckerberg, have kind of softened on Trump. What role do you think the architects of this digital age play in the direction that mainstream

politics has headed? Well, look, I think that's a complex question. Because in the United States, status and power follow money. So they're very, very rich, especially once they get. voice and public recognition have enormous power. They have exercised that over the last 30 years in multiple forms. For very, very long time, the tech sector was closer to the Democratic Party, and that wasn't any better.

But I think, again, we need a better system of democratic accountability at every level. That should start by. limiting the role of money in politics, which of course is a big problem for the United States. Canada is doing much better. Europe is doing much better on these fronts. Shocking amount of money. Yeah, shocking amount of money. Every time I can't believe it. Yeah. But there is a new danger in the Trump Big Business Alliance, which is that American government is enormously powerful.

and if they get together, that just is an unstoppable amount of power globally. And it can even be worse, which is, some of you may shudder at this, but the least bad option in that case would be businesses control the American government. The worst case would be Trump controls the businesses, a Putin model. You know, Russia is in the current state, not because the oligarchs control Putin, because Putin controls the oligarchs. That's what Trump was hoping to achieve. achieve. I don't think he has achieved that. And hopefully he won't in the next two years.

AI, there's been a lot of concern about job loss and its rapid progress. Anthropic CEO Dario Omodai says it could replace half of all entry-level white collar jobs in the next one to five years. And so just how are you thinking about the rapid progress we've seen from AI as of late and how that fits into the conversation? Well, look, a couple of things. First, First, progress in AI has been really spellbinding. And if that progress continues to go in the direction that Dario Amadeh, Sam Altman, and many of the other tech leaders envisage and desire, which is automating more and more jobs for which the apex is, of course,

artificial general intelligence where these models can do everything that humans do much better than humans. If we go in that direction, then goodbye to working class liberalism, goodbye to democracy, goodbye to shared prosperity, goodbye to jobs. Because how are we going to create jobs? How are we going to create good jobs? Perhaps there might be some menial jobs, cleaning, cloud, computing centers or something like that. But we really need to think about what it is that we want in terms of economic flourishing and social flourishing in the age of AI. And the agenda, big tech, is the most worrying part to me, because it leaves no room for that kind of shared prosperity.

Now, that's really bad news, because if it were to come to reality, we would not have a democracy left. I have no doubt that democracy, as we understand, it could not exist under anything close to mass-scale automation and mass-scale control of information by a few tech companies. Here is the good news, which is only a silver lining. First of all, that's not the only way in which you can use AI. There are many different ways in which you can use AI,

and in particular, what I've been advocating is what I call pro-worker AI, which would not have the same damage and it might even have benefits. That's not where we're going, but it's a feasible direction. And second, things are not. going to happen, in my opinion, as fast as Dario Amadei or Sam Altman are foreseeing, which means we were expecting a huge productivity boom and we all become as rich as creases next year. But it's good news if you want to actually do regulation, try to redirect AI, try to create a democratic framework for controlling these very, very powerful

companies and individuals. It's not easy. I wouldn't say that I am, optimistic that we can do it, but I'm hopeful that we at least have more democratic instinct and aspiration to rise for that challenge. I mean, you have an American administration that's moving in the opposite direction. Oh, boy, yes. So just how? I guess this is my question. We have to wait for two years first.

Is that the plan? Oh, yeah, absolutely. I mean, the Biden administration had no roadmap for AI. They did not understand AI. They had very retrograde regulatory instincts that didn't grapple with the real issues. But it was one million times better than the Trump administration. Trump is accelerationist in the worst possible way. His plan for AI is like AI as a tool for American government and military dominance over the world.

And, you know, while I remain hopeful that AI, can be used for human betterment. I do not think crypto can be used for human betterment. And he's all in crypto, and he's creating this real toxic mix of crypto and AI, merging in the tech sector. So it's just a real, I think, shit show is that an academic term I can use. So, yeah, we have to wait for two years. I love that we're going to end this conversation on a shit show.

It feels refreshingly honest. Thank you. All right. That is all for today. I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow. For more CBC podcasts, go to CBC.ca slash podcasts.