The middle class and its importance for democracy: A European study of the middle class, decreasing democracy and rising extremism surrounding the financial crisis of 2008-2010

Abstract: By testing theories from the likes of Seymour Martin Lipset and Francis Fukuyama, this thesis aims to illuminate the correlations between the size of a nation’s middle class and the stability and rigor of its democracy. Using quantitative data on democracy and middle class size in the time surrounding the financial crisis of 2008-2010, this thesis illustrates the parallel declines in both democracy and middle class size in Europe. Also entailed are the negative ramifications on the middle class caused by the neoliberal agenda and how this relates to the rise of extremist parties throughout Europe. Democracy data is extrapolated from the 2007 and 2014 democracy indices from the EIU and data on the middle class is mainly sourced from the OECD, based on percentages of the population earning 75-200% of median income. This thesis focuses especially on euro member states who have faced growing extremist movements and threats to democracy during the last decade. Italy, Greece, Spain and Portugal are nations examined which received austerity packages following the euro crisis, where the degree of democracy and the size of the middle class has diminished. Relevantly, Germany and France were on the opposite end of the austerity packages but the recession had comparable effects on the middle class size and democracy score.