How Democracy Is Being Undone—and What to Do About It

(Illustration by Sébastien Thibault)

About the author: William Priest is vice chair of TD Wealth and founder of Epoch Investment Partners. He co-authored Consequences: The Rise of a Fractured World Order with David Roche and Alex Michailoff.

Democracy, once thought to be self-sustaining, is on defense. Like every system before it, democracy has gone through cycles of strength and weakness—but its survival is no longer guaranteed. What is at stake is not simply a style of governance, but the wealth, freedom, and happiness of its citizens.

The brief period of U.S. dominance after the Cold War has ended, replaced by a multipolar era where democracy is challenged both from outside and within. Externally, democracy faces an increasingly coordinated “Axis of Autocracies”: China, Russia, Iran, and North Korea. Each rejects the liberal international order and seeks to replace it with authoritarianism. They share a conviction that democracies are weak, divided, and destined to fail.

This struggle is taking place in a gray zone, where cyberattacks, propaganda, and economic coercion substitute for open war. Russia’s assault on Ukraine is a stark example. The war is a blatant effort to redraw borders through military force. But it is also an attempt to destabilize European democracies through energy blackmail and attacks on infrastructure.

China, meanwhile, uses economic leverage to expand its influence across the Global South and to undermine democracy. Its Belt and Road Initiative, for instance, appeals to countries long resentful of Western colonialism. Iran, for its part, exports drones, militias, and ideology to extend its reach. North Korea relies on making nuclear threats for its survival.

The Ukraine war has only tightened the bonds among these regimes. They are linking military supply chains, supporting each other economically, and strengthening their political alignment. The parallel to the fascist axis of the 1930s is hard to miss.

And yet, the greatest danger to democracy may be coming from within. Populism, fiscal recklessness, and a collapse of civic discourse are sapping resilience from the inside out. Populist leaders thrive on division, promising quick fixes while weakening institutions. They appoint loyalists over competent officials, undermine courts, and turn citizens against one another.

Social media supercharges the problem. It creates echo chambers where falsehoods spread faster than facts. The phrase “seeing is believing” is turned upside down. Now “believing is seeing.” The Jan. 6 attack on the U.S. Capitol was the most visible consequence of this inversion, but it will hardly be the last.

Social media and artificial intelligence are reshaping the information war. Generative AI now enables anyone to flood the internet with convincing fake news, deepfakes of politicians, and propaganda at scale. Authoritarian regimes rightfully see it as the perfect weapon against democracy: Reality can be manufactured, history rewritten. Even leaders of democracies are starting to use these tools to distort reality and sow political discontent.

AI also threatens jobs in sectors once thought safe—finance, law, customer service. This is already fueling the type of economic resentment that drives populism. Meanwhile, the end of globalization will bring about higher costs for consumers and reduced economic competitiveness. Fiscal profligacy and unsustainable debt-to-GDP ratios undermine democracy by threatening confidence in currencies and capital markets.

Democracy isn’t collapsing from single blows. It is being chipped away—internally and externally. To survive, it requires decisive action.

Democracies must stop trying to manage external crises at the margins and instead pursue victory where it matters. Half measures only prolong conflicts and embolden autocracies. Ukraine must be given the support required to decisively defeat Russia, not merely survive. Strengthening NATO and U.S. alliances is essential, both for deterrence and for spreading the cost of protecting democracy. Retreat into isolationism—whether under the banner of “America First” or any other slogan—will be ruinous.

Internally, democracies must restore their legitimacy by delivering growth and fairness. Citizens need to have a stake in the system. That means policies that encourage wealth creation while ensuring broad distribution: meritocracy, progressive taxation, and strong social safety nets.

Civic strength is equally vital. Institutions must be protected from populist capture: courts, regulators, and agencies must remain independent. Civic education, critical thinking, and credible journalism are essential antidotes to disinformation. Immigration, though politically fraught, is an economic lifeline for aging economies. It should be managed pragmatically rather than ideologically.

Finally, democracies must regulate AI to safeguard freedom and human dignity. If left to authoritarian regimes, AI will become an engine of control.

The most dangerous scenario is the convergence of internal populism with external autocratic pressures. Yet democracies retain immense advantages: wealth, innovation, alliances, and the ability to self-correct. The future is open—if citizens are vigilant, united, and reject the autocratic fuel of fear.

Benjamin Franklin, when asked what kind of government had been delivered to the new republic after the 1787 Constitutional Convention, offered a timeless warning: “A republic, if you can keep it.”

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