Michael Ignatieff addresses this issue in an article in the New York Review of Books: Are the Authoritarians Winning?
"Democracies today are in the middle of a similar period of envy and despondency. Authoritarian competitors are aglow with arrogant confidence. In the 1930s, Westerners went to Russia to admire Stalin’s Moscow subway stations; today they go to China to take the bullet train from Beijing to Shanghai, and just as in the 1930s, they return wondering why autocracies can build high-speed railroad lines seemingly overnight, while democracies can take forty years to decide they cannot even begin."
The focus of Ignatieff’s article was not on economics so much as political leadership. The United States has long been a dominant economic power; it has also assumed the leadership role in promoting liberal democracy as the goal for which all societies should strive. The ability to make the case for liberal democracy has been weakened.
The United States seems to have become a contrary example that demonstrates the inadequacies and inefficiencies of democracies.
The example Ignatieff uses to illustrate incomprehensible dysfunction is the decision by the Supreme Court (Citizens United, 2010) to conflate the power of wealth to influence the execution of government with "freedom of speech."
How can the United States promote liberal democracy overseas when its internal policies seem determined to ensure the establishment of a plutocracy?
Labeling Citizens United "insanity" seems appropriate. However, there are at least two people who think the decision was a good move, and since they were provided a platform to express their opinion in the journal Foreign Affairs, there must be many others.
Glenn Hubbard and Tim Kane have produced In Defense of Citizens United. It opens with this lede:
These authors identify fiscal irresponsibility as the main problem and attribute its source to campaign finance reform.
Their complaint was that those who had vast sums to spend on influencing elections were supposedly rendered mute, and alternate political parties were inhibited.
"Starting with FECA in 1974, the two main parties were essentially given government protection from smaller competitors."
The authors recognize that the winner-take-all structure of our election system favors a two-party result and makes it difficult to form a third party, but they seem to conclude that it was campaign reform that made it impossible. But not to worry, the demise of campaign funding limitations will generate a new and happier era.
Hubbard and Kane seem to have a rather myopic view of political history. For more than a century after the Civil War we had, in effect, a three party system: liberal Democrats, conservative Southern Democrats (Dixiecrats), and fiscally conservative Republicans. The Southern wing of the Democratic Party would align itself with whatever group would assist it in maintaining its "Southern way of life." The seeds of our political dysfunction were sown when the Republican Party convinced the Southerners they had a comfortable home in the Republican Party.
What the Southern politicians have always wanted was to maintain one-party states and a low-wage workforce with as few benefits and regulatory protections as possible. They have always been in favor of a small federal government in order to exploit their workers to the greatest extent possible. This aligns them perfectly with many wealthy conservatives whose interests are more financial than social. They have not only found a home in the Republican Party, they have become the Republican Party.
Isaac William Martin has produced an illuminating study of how the rich have utilized the political and social methods of the poor and dispossessed in order to protect their wealth in his book Rich People’s Movements: Grassroots Campaigns to Untax the One Percent. Martin details how the rich have been quite busy over the last century using their wealth politically. He identifies five distinct "rich people’s movements" from the past.
1936-1957: campaign for constitutional amendment limiting tax level
1951-1964: campaign to repeal federal income taxes
1978-1989: campaign for tax limitation/balanced budget amendment
1993-2001: campaign to repeal the estate tax
The lesson rich peoples’ activists learned from the past century was that it was not efficient to bide one’s time and wait for allies to appear or propitious moments to arrive. The lesson they learned was that the most effective strategy for them was to take over a political party.
Campaign funding limitations did not inhibit the takeover of the Republican Party. One can only assume that removing the limitations will accelerate movement towards the goals of the radical/wealthy right. Martin provides this conclusion:
The United States is no longer in a position to tell other nations "Look at us, this is the kind of government you should have."