Liberal democracies have a creeping loyalty problem

The writer is author of ‘This Is Not Normal: The Collapse of Liberal Britain’ 

What happens when an organisation or service stops working as well as it should? We are all confronted with this question periodically, as consumers, public service users, clients and voters. But the feeling of powerlessness in the face of service failure grows all the more acute as the consequences of that failure grow more severe. In cases such as the UK’s inadequate coronavirus testing regime, government incompetence has become a matter of the utmost urgency.

This sense of mounting calamity is not unique to the UK. It has been heightened by the political upheavals in many liberal democracies in recent years. The creeping normalisation of clientelist governance, favoured by autocrats such as Hungary’s Viktor Orban and US President Donald Trump, produces a politics that is indifferent to the success or failure of policy implementation. One thing that unites all these administrations, UK Prime Minister Boris Johnson’s included, is that they privilege loyalty over policy effectiveness. 

In his 1970 book, Exit, Voice and Loyalty, the economic theorist Albert Hirschman offered a brilliantly simple analysis of what options are available to us when we are being let down: we either go elsewhere or we complain. These options (“exit” and “voice”) are central in organisational theory, especially in corporate governance, where the balance between exit (withdrawal of capital) and voice (voting, board membership) is fundamental.

In contrast, the third concept in Hirschman’s title is often forgotten. This is a mistake, given loyalty’s role in generating the chaotic styles of governing we see today. Loyalty is a positive force in many circumstances — but only up to a point. Populism pushes public administrations past this point.

The benefit of loyalty, Hirschman argued, is that it reduces the speed and ease of exit, making it more likely that people will use voice. To put that another way, it’s good for democracy. If people are willing to stick with a supplier, a boss or a location (and not make for the door at the first sign of trouble), that makes them more likely to speak out and demand change. Businesses nurture loyalty strategically to reduce the appeal of exit, even if this doesn’t translate into greater voice.

But it is also possible, Hirschman observed, for “loyalty to overshoot the mark”. Sticking with a supplier or political party that fails repeatedly eventually becomes a kind of blind faith, as in a fan’s relationship to a football team. There are clear advantages to those in positions of power seeking to inculcate deep loyalty as a defence against competition. With enough loyalty, organisations can deprive people of both exit and voice, as cults and gangs have done. 

A strong emphasis on personal loyalty has been a consistent feature of both the Trump and Johnson leaderships, albeit in different ways. Mr Trump combines a demand for loyalty with acute paranoia, resulting in a stream of firings. The natural endpoint of this became clear at this year’s Republican National Convention: many of the keynote speakers were members of the Trump family.

Mr Johnson, by contrast, never sacks anyone, regardless of policy failure (Gavin Williamson), intimations of corruption (Robert Jenrick) or defiance of the most basic principle of collective sacrifice at a time of national emergency (Dominic Cummings). Instead, senior Whitehall officials have drifted off, as it becomes clear that loyalty is now the principle holding government together. These departures are not exits in Hirschman’s sense (that is, they are not responses to failure), but refusals to abandon a commitment to the civil service code or the rule of law. 

The power of loyalty in the Johnson administration is also seen in public procurement, with contracts having been awarded this year to companies that worked on the 2016 Vote Leave campaign.

More startling was the revelation last month that the UK government intended to abandon the state aid prohibitions, which prevent subsidising and otherwise favouring individual companies, that the EU demanded, such that the government could establish more intimate relationships with chosen firms. The official justification for this was that it would free the UK government to nurture the development of world-beating technology businesses of the future. The suspicion is that it will make it harder to track or prevent the funnelling of taxpayer money into the private sector. 

Too much loyalty makes failure impossible to root out or punish — it is a threat to markets as much as to democracy. Eventually, it makes failure impossible to identify with any certainty or accuracy, and then it becomes systemic. 

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