Penguin Random House published a new book by MIT economist Daron Acemoglu examining how deindustrialization and technological changes have weakened the civic coalition supporting democracy, MIT reported. The volume is titled “What Happened to Liberal Democracy? Remaking a Politics of Shared Prosperity.”
Acemoglu, an Institute Professor at MIT who shared the 2024 Nobel Memorial Prize in Economic Sciences with Simon Johnson and James Robinson, argues that economic stability directly supports democratic institutions. He previously explored institutional roots of growth in his 2012 book “Why Nations Fail” and his 2019 book “The Narrow Corridor.” In the new work, he critiques neat formulas such as Jean-Jacques Rousseau’s concept of a “general will,” arguing that actual governance in pluralistic societies remains an ongoing, messy negotiation.
Middle-class incomes in the United States grew by 2.5 percent annually in the roughly three decades following World War II. Wage growth slowed as companies offshored and outsourced manufacturing work to contain costs. In recent decades, middle-class income growth dropped to about 0.5 percent annually, while the share of national income captured by the top 1 percent of earners doubled from 10 percent to nearly 20 percent.
Computers accelerated this divergence by replacing clerical office staff and shop-floor industrial workers who earned middle-class wages without holding college degrees. While computing created new positions, those roles went primarily to college-educated employees. Acemoglu notes that this material divide reshuffled political alignments along educational lines, a dynamic intensified today by social media, polarization, and artificial intelligence.
Trade unions and broader political coalitions offer a path to rebuild self-governance, according to Acemoglu. He advocates for “working-class liberalism,” which he describes as rooted in local communities, focused on jobs and public services, and opposed to social engineering. While acknowledging that multiracial tensions presented even greater challenges in the 1950s and 1960s, Acemoglu maintains that democracy remains an enduring work in progress rather than a project bound to fail.
