Part I – Introduction: The Conception of Modern Democracy and Challenges it Faces


24 June 2018

Portrait of the founding fathers and signing of the Bill of Rights. United States.

Portrait of the founding fathers and signing of the Bill of Rights. United States.


To many in the West and in the traditional Anglosphere, democracy is often taken for granted. Of all states considered full democracies, as defined by the World Democracy Index, only two are outside of this region. Yet, these modern democracies are facing challenges that will undoubtedly alter the integrity of the institutions that have established them as full democracies. This special report sets out on a mission to define the most severe problems modern democracies face and presents solutions that could prevent irreversible damage.

Modern democracies are usually understood as the sum of three elements. The first, and original element is liberal democracy. By definition, this denotes a state governed by a representative democratic system limited by both individual rights and freedoms as well as restrictions via rule of law on the exercise of political power. The second, and presumptively instituted, but not by law, is capitalism. While not theoretically required, but historically needed, capitalism has proved to be a productive and liberating economic system for democracies to utilize. The third, and later instituted element is the welfare state. While an inclination of such a system was instituted in the 1880s, it was not until after World War Two that it was fully and widely utilized. The welfare state can be understood as a regulation on the capitalist economic system, providing services cheaply to most if not all citizens, which the free market demonstrated it could not.

Elements of liberal democracy were first seen in Great Britain as early as the Magna Carta, but was experienced fully in the United States with the Bill of Rights and the birth of their democracy at the end of the 18th Century. The United States was founded on the ideals of democratic governance, republicanism, and individualism. Representative democracy is the system of democratically electing representatives from geographic locations to represent those citizens in government. Republicanism sought to keep private interests out of government and to have representatives elected, whom were solely interested in the common good. Finally, individualism sought to protect the rights of the individual by enshrining rights and freedoms into a nearly unchangeably rule of law. All modern democracies follow some form of these ideals, with the most notable difference being between republicanism and constitutional monarchism, but this is beyond the scope of this report.

Capitalism is an economic system first conceived by Adam Smith in the middle of the 18th century. At its core it suggests that economics and markets should be left to the individuals to choose what to spend their capital on without governmental or any coercive interference. He believed that this free market or laissez-faire economy would be the most prosperous for all because each would act in their own self-interest. This was fully utilized by the United States and other modern democracies, resulting in the most revolutionary economic changes in history, which began with the industrial revolution.

The welfare state was designed to protect the health and well-being of its citizens, particularly those of whom that were in the worst-off positions. First experienced in the 1880s with the creation of social insurance in Germany, it exploded after the second World War with the creation of welfare, free elementary and secondary education as well as healthcare. Almost all modern democracies utilize these principles, with the United States being an exception by not having universal healthcare. In the post-war era, states have expanded the idea of the welfare state to provide subsidized housing, pharmacare, pensions, child benefits, and other similar programs.

These three pillars have built the majority of institutions and programs citizens of these democracies experience today, but after 250 years of existence and 70 years of extensive expansion, modern democracies are faced with a plethora of issues that threaten their very foundations.

This special report has identified seven major issues facing modern democracies today and offers solutions to each of these to ensure that the values that have shaped the world for the better continue to exist. Over the course of this multi-part report, The Observer will provide solutions to the cost of welfare, changes in the job market, the rise of populism, immigration, social mobility, climate change, and illicit activities. These seven issues are wearing away at the institutions and strength of modern democracies, but it is far from too late to ensure the progress made will not be reversed in any substantial form.

The Observer will publish successive articles for this report throughout the summer. Stay updated by subscribing below.