Beyond Democracy

One of the remarkable features of democracy is that no major political ideology is comfortable with it. Modern liberals insist upon a long list of “rights” that limit the scope of democratic decision making. Conservatives have traditionally been wary about excessive involvement of the (uneducated) masses in political decision making. Classical liberals (or libertarians) want to limit the scope of government to such a degree that there is little room left for democratic decision making, if anything at all (in the case of anarcho-capitalism). In fact, classical liberalism can be conceptualized as a rejection of collective non-unanimous decision making. Despite the fact that a rejection of political democracy is implied in a strict interpretation of liberalism, it is only quite recently that a firm rejection of democracy has become an important theme in classical liberal scholarship.

There are at least three reasons for this: (1) the growing recognition that democracy is not politically neutral but, given some realistic assumptions about human nature, will produce a sharp increase in government spending and regulation; (2) the emerging discipline of public choice (the economic study of politics), which is elucidating the microfoundations behind political failure and waste; and (3) the recognition that in a society without government the question of the proper form of government can be sidestepped altogether.

Beyond Democracy: Why democracy does not lead to solidarity, prosperity and liberty but to social conflict, runaway spending and a tyrannical government, a recent publication by Dutch libertarian authors Frank Karsten and Karel Beckman, distinguishes itself  from other recent classical-liberal publications about democracy in that it aims to bring all the major criticism of political democracy together in a well-written, highly quotable little  book. There are a lot of complicated issues in political philosophy and classical liberal scholarship but making the case against political democracy is not one of them. One could argue that many defects of democracy can be attributed to the joint effect of the irrationality of voting and Milton Friedman’s classic observation that spending someone else’s money on someone else is the worst way to make spending decisions. In Beyond Democracy Karsten and Beckman take aim at 13 myths about democracy:

  • Myth 1 – Every vote counts
  • Myth 2 – The people rule in a democracy
  • Myth 3 – The majority is right
  • Myth 4 – Democracy is politically neutral
  • Myth 5 – Democracy leads to prosperity
  • Myth 6 – Democracy is necessary to ensure a fair distribution of wealth and help the poor
  • Myth 7 – Democracy is necessary to live together in harmony
  • Myth 8 – Democracy is indispensable to a sense of community
  • Myth 9 – Democracy equals freedom and tolerance
  • Myth 10 – Democracy promotes peace and helps to fight corruption
  • Myth 11 – People get what they want in a democracy
  • Myth 12 – We are all democrats
  • Myth 13 – There is no (better) alternative

Beyond Democracy is first and foremost a popular work written to educate the reader. There are a number of passages that could be more effective but because they can be restated without substantially modifying the core claims about the flaws of democracy I will confine myself to a number of comments and suggestions for improvement.

Despite the occasional study that purports to claim that high income earners benefit the most from (subsidized) government services, democracy is usually a poor deal for them. They cannot be blamed for wondering if they would have been better off in the “state of nature” instead of submitting to a social “contract” that extracts more money from them than they would ever spend on these services if they were sold on the free market, including protection of their wealth. One of the most misleading ways to look at how the rich fare in a democracy is to look at their tax rates. Warren Buffet’s secretary may pay a higher rate than her employer but Buffet indisputably sends a lot more money to the government. Such a practice would not be possible in a free market because companies that would price their products and services as a percentage of the consumer’s income would quickly lose customers to a competitor.  The outcomes of democracy may be a bad deal for almost everyone, but the one person, one-vote rule renders the wealthiest people defenseless by definition.

Moving to another topic, there is something to the “myth” that democracy fosters peace. Steven Pinker makes a reasonably strong empirical case for this in his book The Better Angels of Our Nature: Why Violence Has Declined. Of course, since most modern democracies are also connected by trade, it is hard to tell what it is more important; commerce or democracy. Pinker admits that there is one distinct advantage of commerce:

The pacifying effects of commerce…appear to be even more robust than the pacifying effects of democracy. A democratic peace strongly kicks in only when both members of a pair of countries are democratic, but the effects of commerce are demonstrable when either member of the pair has a market economy.

One might also add that commerce itself is a peaceful activity, something which cannot be said about the operation of (democratic) government.

In modern democratic countries it can be safely assumed that government will seek to abolish conventional forms of money and establish a fiat currency. Karsten and Beckman’s discussion of this topic is generally sound but suffers somewhat from the Austrian bias to highlight examples of governments causing economic recessions and depressions by increasing the money supply (or manipulating interest rates). But as economists such as Milton Friedman and today’s market monetarists make clear, government can also create problems by not responding to an increased demand for money. In a free market with competing currencies, banks ensure the neutrality of money by bringing the demand and supply for money into equilibrium. Increasing or decreasing the money supply is not wrong as such, but only relative to the demand for money.

Another part of the book that has an Austro-libertarian flavor to it are claims about the (ultimate) unsustainability of the modern welfare state. Many libertarian authors have a tendency to look at the growth of government as a downward spiral, culminating in ‘fascism’, followed by debt-default and collapse. A different perspective, however, is that modern democracies simply stabilize around an equilibrium where around 50% of GDP is being re-distributed and episodes of excessive regulation and taxation are followed by (transient) episodes of some deregulation and small tax decreases (‘neoliberalism’). Absent a cultural change about how people think about the merits of collective choice, a more likely scenario may be Anthony de Jasay’s “churning society” in which income is pushed around in so many ways that most people cannot have the slightest idea whether they are gaining or losing from this wasteful spectacle.

In case the reader had not noticed, the authors end their book by emphasizing that their perspective is informed by libertarianism. I suspect, however, that the strongest arguments against political democracy are not ideological in nature but can simply be derived from decision theory and an evolutionary perspective. A single vote has a negligible effect on the outcome of an election, regardless of whether one is a socialist, liberal, conservative, or a Ron Paul supporter. As the authors write, “voting is the illusion of influence in exchange for the loss of freedom.”

Then why do people vote? The most plausible explanation is that humans have participated for a very long time in small groups where “political” participation did make sense. Whenever we are placed in a situation where we are at the receiving end of a collective decision our first impulse is to participate and not approach the issue from a probabilistic perspective.  The authors propose a “new political ideal” but in future editions of this book they might consider restating their aim as a depoliticized society. One of the “root causes” that makes people support democracy is to expect benefits from classifying an individual problem as a collective choice challenge. For the average person, regardless of political persuasion, this is not an effective way of solving problems, especially when the number of people subject to government keeps increasing by further centralization.

To promote their case against democracy the authors have launched a website at Frank Karsten also agreed to an interview for this website.

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