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Eric Li:

I want to focus more about democracy, and we'll talk about China a little bit, too. You know, we are having this discussion seems to me at a precarious time for democracy. A lot of rumors swirling around the globe that democracy is in trouble. Kishore just summarized some of the rumors. I hope it's fake news that democracy is in trouble, but the coverage has been relentless and data is mounting.

Freedom House, its most recent report this year, says global decline in democracy has accelerated. In addition, it says U. S. democracy has declined significantly. V-Dem in Sweden, also says their surveys show a global decline in democracy, interestingly, U. S aligned nations declined the most for some reason. Larry diamond, one of the most senior democracy scholars in the world, has been complaining about what he called democratic recession for many years, and recently he has just upgraded that to a crisis level. This year, none other than president Biden implied that the president of China is betting democracy can't keep up with autocracy, and they must prove China wrong. In his address to the first joint session of Congress, he said that this point in history, is about whether or not democracy can function in the 21st century. He said, can we act in the framework needed to compete with autocracy？

And I must say, there's almost like a whiff of despair in such proclamations. It reminds me of China. When I was grown up right after the Culture Revolution, we were in deep trouble，our leaders always saying that time is running out, we needed to prove socialism works better than capitalism. It's a precarious moment, also a confusing moment.

Tunisia, is the country where the Arab Spring began. As we know, before the Jasmine Revolution, it was characterized as a dictatorship. According to the Freedom House, before the Arab Spring in 2010, this country was not democratic. After Jasmine Revolution, the scores have improved to partly free. Then it got even better, all green (free). According to the Freedom house, democracy is triumphant. Yet, the people in Tunisia are miserable, they hate it. As the numbers from Freedom House show improvements, significant improvements, the people of Tunisia are suffering. Their views are opposite. What is going on here？

This is from Pew's research, and they stopped collecting data at 2016. I don't know why, maybe it's just too embarrassing. But my guess is after 2016, according to what I read in news reports, Tunisia's situation had gone even much worse. And now we have a new regime, I'm not predicting whether this new leader will succeed or fail, I'm just saying there has been a big change, because it has been so bad. Tunisia was where Arab Spring began and was billed as a shining example of the Arab Spring, and later the only success story of the Arab Spring. This is very confusing, the data and the facts are very confusing.

Then, come back to the summit of democracy that's about to take place next week, China is not on invite list. But 110 places were invited, very diverse group of countries, very different in historical development, culture and economics. I just ran the numbers, how they did with one of the most pressing crises of our times, the Covid-19 pandemic. These 110 invitees accounted for 4.4 billion population, which is 56% of the world's population.They had 4.2 million fatalities, which is 83% of the world's total. Unfortunately, these countries handled it badly. Three most prominent players in this group, The U.S. had 3/4 million deaths; Brazil, 610,000; India, 470,000. And by the way, the U.S and India, each respectively claim that one is the oldest democracy in the world, and one is the largest democracy in the world. So, what is going on with democracy？

I'm not an expert, I'm not Larry Diamonds, but I want to, from a businessman's perspective, venture a diagnosis.I studied the methodologies that are being used by Freedom House, and V-Dem and those institutions when they evaluate democracies. And I found something very interesting, they only measure a particular set of institutional procedures. And these procedures strike me as very specific to liberal politics and liberal societies, certain kind of elections, freedom of press, just liberal values. It seems to me that the disconnect is, maybe they're measuring liberalism, not democracy. They're measuring one kind of democracy called liberal democracy, and at that they're only measuring the liberal part.

We all know that democracy long preceded liberalism by at least a couple of thousand years. The democracy in ancient Greece was decidedly not liberal. And many scholars argue China’s Confucian values have a lot of democratic elements, but China is not liberal. Liberalism only exists, only was born at the onset of the modern era.During the enlightenment, a lot of great thinkers like Locke, Montesquieu, Mill, they proposed revolutionary ideas about how to govern human societies. And they centered around a set of values that we now call liberalism. The individual being the center of the universe, autonomous, private property was virtually sacred, a procedural take on the rule of law, and these values became political institutions that we call liberal institutions.

My hypothesis today, I could be wrong. My hypothesis is, is it possible the problem today is liberal regimes are failing democracy, and that is what is ailing democracy？ Because liberal society has led democratic progress in the world for some time. We've got to credit liberal societies for that, but now liberalism is failing democracy. I want to venture a solution, too. We can't just measure procedures. If you look at V-Dem and Freedom House, they only measure procedures, the one thing they never measure is outcome, or result. I am a businessman. No one has ever come to me and pitched me a stock and say you've got to buy this stock because this company has been losing money for 20 years, the technology sucks, people are leaving in droves, they have no customer, but the company is really governed with great procedures, the board meetings are conducted beautifully. I won't buy the stock, that doesn't happen. I think we ought to consider measuring outcomes, is the system delivering democratic outcomes？

I don't care what are the procedures.Are they liberal procedures or islamic procedures, Chinese procedures, is it delivering democratic outcomes？ Democracy's normative end must be delivering satisfaction to a vast majority of the people over long duration, otherwise what are we in it for？ What good is a set of procedures if it result in undemocratic outcomes？ What good isan election If elections keep producing incompetent leaders？What's goodabout judicial independence if it protects only the rich？ What's so great about freedom of press, freedom of speech, if it leads to division and dysfunction in societies？

I think we should explore, we should have at least dialogue, discourse around the world about how to measure democracy by outcomes. Are the people satisfied with how they're governed？ Are they optimistic about the future？ Is your society cohesive？ Are you better off than before？ When I was studying in the United States, it was President Reagan's second term, "Are you better off than four years ago？" Are you better off？ Is your country investing enough for future generations？ Or are they just spending future generations money？ There's a Chinese scholar in Peking University, who is suggesting that there should be a social mobility index. That sounds right to me. Is your society socially mobile, that should count as whether your systems generating democratic outcome.

So, I would like to use this opportunity to suggest a new discourse around the world. There was a great American leader (Woodrow Wilson) who said: Make the world “safe for democracy”. I think now we need to make democracy better for the world. We need to start a dialogue and a discourse. My suggestion is we need to develop new measurements.

New measurements are good, especially for developing countries, because a lot of developing countries in the past few decades, have been shackled by liberal doctrines and liberal institutions that they're unable to develop their democratic potential. So they could explore new ways.I might say that new measurements will be good for liberal societies. Liberal regimes are failing because I think nobody's challenged them, they never have been measured by outcome. Imagine if you go to school and you take tests, you never get grades, a lot of them in America these days, you're not going to do well.

It's basic economic theory that monopolies, when the monopoly is forced to compete, they don't do well, they can't compete. And liberal societies have pretty much monopolized interpretation of democracy that they take the democratic credentials for granted. That's dangerous for liberal society. I think liberal democracy ought to have a chance of succeeding. I think there should be many forms of democracies and they can compete and the competition is better.

For China, I think China ought to actively participate in a new discourse on democracy. It's disappointing that China has been absent in the global dialogue and discourse on democracy. China doesn't talk about this, they don't send people out to explore ideas of democracy. So China needs to actively participate, instead of ceding the ground, and they need to acknowledge their own successes and failures, and to develop new measurements.

For Mr. Biden, when he holds this big party with 110 invitees, I want to make a suggestion for his keynote speech, not that he'll take any advice from me, but I think he should say that “let's get our act together and set some goals and be measured by those goals, five years from now, ten years from now”. Liberal democracy is failing now, is in trouble, but liberal democracy succeeded before, especially in the second half of the 20th century, liberal democracy succeeded, beautifully delivered, amazing, unprecedented improvements in their people's lives, to the point that so many countries, including China, after the Cold War sought to emulate a lot of the West's political practices, like market economics.

Mr. Biden should say, not all liberal democracies are failing. If we can't bring ourselves to say that maybe China is doing something right, we can learn, we'd lose too much face. But among the liberal democracies, there are those who are succeeding. Sweden, Norway, Finland, New Zealand, their numbers are pretty good. For a start, maybe big democracies could learn, liberal democracies can learn something from these smaller players. So if they don't act now, they are in danger that liberal societies, the word liberal, will no longer deserve to be followed by the word democracy.

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