Hey folks, Jeff Berman here.
In this episode, we're sharing my conversation with political scientist and author, Barbara F Walter.
Her most recent book is How Civil Wars Start and How to Stop Them.
She joined me at the 2025 Masters of Scale Summit for a conversation about the state of American democracy and the vital role of business leaders in safeguarding stability.
Barbara offers concrete examples from around the globe to inform her perspective on what is likely next for our economy and for our country.
I hope you find it as thought-provoking as I did.
Popularly, I think we think about the United States as the world's longest-standing democracy.
Are we?
We are no longer the longest standing democracy.
Switzerland is, which kind of is good and bad news to me.
I love America.
I'm American, but my mom came over from Switzerland.
So I feel like that's okay, maybe.
We lost that title in December of 2020.
I'll give a little bit of background, because this task force that I served on from 2017 to 2021 is something that most Americans don't know about.
And it's been incredibly instrumental in my research and it's gonna be incredibly important to America moving forward.
So the Political Instability Task Force is run or was run by the CIA.
It existed from 1994 and it shut down in August of 2023.
I don't know why they shut it down, but one of its goals was to help the US government predict what countries around the world were likely to experience significant political violence and or significant political instability within the next two years.
And when the task force put together this model, in the room were half political scientists, experts on conflict and civil war, like myself, and half data analysts.
And the data analysts asked the experts, tell us everything that could possibly potentially lead a country towards civil war.
And we gave them 38 different factors.
So sort of the grab bag of anything that we had a hunch might matter.
Some of the things we thought for sure would matter, like poverty, income inequality, whether a country was really ethnically heterogeneous, whether there was a group or groups that were heavily discriminated against.
So we gave them 38 factors and they left.
And a few months later they came back and they said it turns out that only two of those factors were highly predictive and they were not the ones that the experts thought were gonna be important.
The very first and the most important one turned out to be this variable called anocracy.
And the way to think about anocracy is it's just a fancy term for a partial democracy.
It's a country that has elements of democracy, but it also has elements of autocracy.
And usually the countries that are partial democracies are getting into this middle zone, either because they're once healthy democracies that are declining or they're once hardcore authoritarian regimes that are democratizing.
It turns out that the most unstable place to be as a government is in this middle zone.
Political instability and political violence is extremely rare in strong, healthy democracies.
It's actually relatively rare in hardcore autocracies.
Almost all the violence and the significant instability and that's political, economic and social instability happens in this middle zone.
The second factor was whether citizens in those partial democracies were organizing their political parties mainly around race, religion or ethnicity, rather than ideology.
So, instead of joining a political party because you were a conservative or liberal, or you were a communist or a capitalist, you were joining because you were black or white, you were a Muslim, you were a Christian, you were a Serb or a Croat.
If a country had these two features, so it was a partial democracy with these identity-based parties.
The task force considered it at high risk of either significant political instability and or political violence within the next two years and we put it on a watch list.
So the US government has known what the main underlying features are of political violence and political instability.
The CIA is not allowed to monitor anything having to do with the United States.
So when we got together and we got together about four times a year we would talk about Ethiopia, we would talk about Venezuela, we would talk about Syria, but we would never, ever talk about the United States.
But of course, I was a private citizen.
I had access to the data.
I knew the model.
And when I went to the data to see where the United States was I started in 2017 I could see that by the CIA's own measures that it had used in this model, both of those features were emerging here in the United States and they were emerging relatively rapidly.
A long answer to your question, but by December of 2020, By that anocracy measure, the US had fallen for the first time into that middle zone.
Incredibly important foundation for where we go with this.
I'm going to set aside the risk of civil war and allow folks to read the book and digest it.
But we know that stability is critical for business to thrive.
How should business leaders be thinking about this moment and what their role our role in this needs to be as we go through this next phase of America?
Yeah.
So I'm so grateful for the opportunity to be here, because when I think about American democracy and what are the three big legs of power, if we want to make America's democracy healthier and stronger, so get us in a safe space where really there's very, very little violence and instability.
The three pillars are political leaders.
They could institute reforms from the top.
Let's say maybe that's not gonna happen right away.
No, this is not gonna.
It could be voters, so they could vote in high numbers and change the makeup of Congress.
That's probably not gonna happen.
The third big leg is business.
And in fact, business is probably the most powerful actor in American politics, simply because of the way our political system is structured.
They have an enormous influence in who gets elected, what policies they pursue.
And so if business were willing to get involved, it could have a big influence.
Still ahead, more with political scientist Barbara F. Walter.
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OK, so I'm a CEO of a big public company, or I sit on the board of a big public company and I'm going look Barbara, thank you.
But I'm worried about the next quarter or the next quarter after that.
And sticking our head up and putting us on the radar of an administration that would rather us cozy up than fight them probably doesn't seem like a great idea.
I'm not incentivized to think super long term.
What am I supposed to do?
Yeah.
I think one of the misconceptions that almost all Americans have, not just the business community, is that they think we have time.
I think they think of political systems as this sort of bimodal distribution.
You're either a democracy or an autocracy.
And I think everybody in this room would agree, wow, we are really far from being an autocracy.
We're not a China or North Korea or Bahrain.
You know, we probably have declined somewhat, but we have a long way to go before we have to worry.
What they don't understand, again, is this middle zone.
Autocracies have low levels of instability for reasons that are quite different from democracies.
Democracies have very low levels of instability.
It's an inverted U-shape.
All of the instability happens in the middle.
So I would say to business leaders who really care very deeply about stability in all its forms economic stability, political stability, social stability anocracies, those partial democracies, are the most unstable economically.
They have lower rates of GDP per capita, lower rates of economic growth, lower rates of investment, and you can go down the list.
Then either... healthy democracies, or even autocracies.
If you go to political instability, they have higher rates of coups and more frequent leadership turnovers, greater volatility in terms of their policies than either healthy democracies or autocracies.
They have more protests and strikes and demonstrations.
And then they are the most violent democracy governments in the world.
They are involved in more wars with other countries and they are involved with more civil wars than any other type of government.
I'm going to continue being devil's advocate here.
Like that doesn't sound great.
I don't love it.
I'm not, you know, not thrilled about running a business in that environment, but we've got a collective action problem here.
And if I stick my neck out alone, I'm risking, you know, am I breaching fiduciary duty?
Am I hurting my shareholders?
How am I as a leader, business leader supposed to handle this?
I think one is simply to start planning, right?
You break collective action problems by beginning to coordinate.
And maybe one way to answer the question is to give you some examples.
You guys, if you've been following Brazil, follow what's happening in Brazil in real time.
It's really extraordinary.
Bolsonaro is a strongman leader.
He wanted to turn Brazil into his own dictatorship.
And he sort of systematically followed the playbook that Victor Orban put out there into the world.
And it looked like he was going to be successful.
And he ran, the last election that he ran in was in 2022.
And everybody was worried that this would be Brazil's last democratic election, last truly competitive election.
And what the major business leaders did of manufacturing, of finance, of the big industries, is they decided that they were gonna hold I'm gonna call it kind of a public service campaign where they went on television together and had a series of ads before that election, where they didn't condemn Bolsonaro but they came out and made the case for the value of democracy.
And they just hammered home how important it was for Brazil to remain a democracy, how it would benefit everybody, businesses as well as citizens and how their vote was going to determine whether this would happen or not.
And you saw unusually high turnout in the 2022 elections and Bolsonaro lost.
Now, Bolsonaro didn't take that loss easily, which is often the case, right?
Those types of wannabe autocrats will try to figure out whatever dirty trick they could use to stay in power.
And he tried secretly to organize a coup.
And what just happened.
It was, I think, the Brazil Supreme Court indicted Bolsonaro for an attempted coup and he's now awaiting sentencing.
So what that did is basically, we hope, ended Bolsonaro's ambitions, but it sent a very, very strong message to other wannabe autocrats in Brazil, to Brazilian citizens, to other important actors, that the business community was behind democracy and that it was to the benefit of of everybody.
The only other example I would give you is South Africa.
The apartheid regime ended in the early 1990s.
It was a surprise to a lot of people.
I was already studying civil wars back then and when civil war, people would get together And we were like well, where do you think?
What country is most likely to have a civil war?
We didn't agree on the full list, but everyone's like, oh yeah, South Africa, for sure.
And it never did.
And it never did because de Klerk, who was the last white apartheid president, decided he was going to hand over power to the black majority.
And he made that deal with Mandela.
And many people thought, oh, de Klerk, you know, what a hero.
And in some respects, he deserves credit for that, but he did that for very self-interested reasons.
The white minority regime in South Africa only survived as long as the wealthy white business community backed apartheid.
And what happened was that economic sanctions eventually took their toll on South African businesses.
And by the early 1990s, business leaders had to make a decision.
They could either have apartheid or they could have profits, but they could not have both.
And when they picked profits and they said we are no longer going to support the apartheid regime, power shifted very, very quickly.
So you said a few minutes ago that there's a sense that we have more time than we do.
Yeah.
What percentage roughly of countries that go into anocracy go all the way to autocracy?
What linger mired in anocracy and which ones you turn back to democracy?
Yeah.
So once countries fall into this middle zone and the countries that fall into this zone grow very rapidly
The speed at which they decline, those democracy declines, matters.
They tend to stay in the middle zone longer.
They tend to be more unstable.
Once they're there, about 45% will eventually become autocracies.
About 35% sort of kind of linger in that zone there.
You have leadership change after leadership change.
It's quite chaotic.
Only about 20% ever return to full democracy.
So it's hard to reverse the process once it has happened, especially if it has happened quite rapidly.
And for that 20.
How long from when you go into anocracy and you're really there, do you usually have to begin that real U-turn before you've just kind of lost the opportunity?
So political scientists have a term for going into anocracy and coming back out to democracy.
We call it a U-turn.
And, of course, you want democracy. to have the U-turn.
That minority of countries that do that U-turn.
That usually happens within five to eight years of when that country declined.
That's usually the first electoral cycle.
So if they're going to turn around, if they're going to turn things around, it usually has to happen relatively rapidly.
The longer you stay in the.
So, given this 20 return number, given the time frame in which the data, and I really appreciate you are a true political scientist.
You are looking at data and making judgments off of that.
And given what we know to be the extraordinary risk to capitalism in anocracy and the move into autocracy and certainly in autocracy, only so many businesses are going to win.
Yeah, you're not getting calls from the business round table or from the CEOs of the largest most powerful corporations in America.
You're sitting in front of hundreds of the most influential leaders in technology and business and academia.
Not-for-profit world.
What's the message to this group?
What do we leave here and do so you do end up in those boardrooms having those conversations?
I think we have to take the threat seriously, right?
If you don't know there's a threat and you don't know what the implications are.
Let me just as a little bit of an aside we know who gets within the business community, who gets hurt the most, who gets hurt the quickest, and then who gets hurt later on.
The bottom line is everybody gets hurt.
Small businesses get hurt immediately.
New companies, startups, it just falls off the cliff.
Innovation falls off the cliff.
Medium-sized businesses.
It sort of has a neutral effect on them in the first few years, but then they're eventually affected.
Initially, big industries do well.
In fact, in some cases they get a bump because the aspiring autocrat recognizes that they are an important constituency, they're an important ally that they will need to get into power.
But eventually, the autocrat doesn't want to share power.
And I'll give you a little example.
I did this just before coming here, looking more closely at Hungary, because Hungary followed A very, very clear pathway from democracy to autocracy.
And you're seeing other people copy that.
I looked at the 50 richest people in Hungary prior to 2010, when Viktor Orban came to power the second time.
When Orban came back into power, he was very, very quick to take control of the media, to fill the Justice Department with his cronies.
He acted very quickly.
So 20 Tandy came in.
Of those 50 richest Hungarians prior to Orban coming into power, only about 23 are still on the list.
15 years later.
That's a big cut.
23%.
38%.
Their companies were hit either with aggressive we'll call it regulations or lawsuits that eventually bankrupted their companies, at which point Orban supporters bought those companies for pennies on the dollar.
22% have disappeared from the public realm.
So I could not find them.
I assume they're there, but I could not find them.
About 4% have died of suspicious circumstances.
So even the wealthiest Hungarians, who probably thought you know, Orban needs us, or I don't want to stick my head out, right?
Only 23% of them are still on that list. the good news, and there is good news.
I'm actually a pretty sunny person.
You are.
I have no idea why I'm doing this.
You are, she really is.
I have no idea.
The good news is we still have time.
Yeah.
And the good news is we have data-driven experts like Barbara, who are writing books like How Civil War Started and How to Stop Them your sub-stack, which is a must-read, and who are available to advise boards, business leaders, investors on the risks and what we can do to get there.
Yeah.
Grateful for your joining us at the Master of Skills stage.
Thank you so much.
Thank you very much.
Thank you.
Thank you.
Thanks again to Barbara F. Walter for joining us.
This interview was recorded live at the Presidio Theater in San Francisco as part of our 2025 Masters of Scale Summit.
Her book is How Civil Wars Start and How to Stop Them, and she has a fantastic sub stack that is a must read.
We'll put a link to all of that in the show notes.
You can find this conversation and much more on our YouTube channel.
Master's of Scale is a Wait What original.
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Senior talent executive is Stephanie Stern.
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