Economic Questions About the “Temple of Democracy”

Is it true, as House Speaker Nancy Pelosi claimed, that Congress is a temple of democracy (“U.S. Capital Police Officer Brian D. Sicknick, who died after assault on Capitol, Protected With a Kind Touch,” Washington Post, January 8, 2021)? She said:

The violent and deadly act of insurrection targeting the Capitol, our temple of American Democracy, and its workers was a profound tragedy and stain on our nation’s history.

This invites a reflection on how Congress, democracy, and the state work. Any moral value attached to these institutions must be consistent with, although not limited to, their likely functioning and consequences.

Anthony de Jasay is one of the many economists who, over the last eight decades of so, have tried to understand the state (the whole apparatus of government). For him, the state is, in positive reality, a redistributive machine that favors some individuals and harm others. One’s ultimate judgement on the state depends also on moral values related to what the state should do. If it is considered good to harm some individuals in order to benefit others (and if de Jasay’s positive analysis is correct), then the state is good. If coercively harming some for the benefit others is morally rejected, then the state is morally bad.

Could we, de Jasay asked, imagine a sort of state that would not be a redistributive Leviathan, that would not be in the business of redistributing pleasure and pain, happiness and submission, but would instead only aim at preventing invasion by, or evolution of, such a state? A sort of state that would not aim at governing? This minimal state, he calls the “capitalist state.” It has never existed anywhere near its pure form but some systems of political authority have been farther from it than others. Many anarchist theorists such as de Jasay think that the capitalist or minimal state cannot survive because it would, by its very logic, soon grab the redistributive function in order to reward its supporters at the cost of other (less loyal) subjects. The state who democratically steals from Paul to give to Peter because the Peters are more numerous than the Pauls is one instantiation of that.

In this perspective, the temple of democracy appears more like a den of thieves and a gang of bullies. It is often difficult to distinguish the state from an organized and heavily armed mob. Although I have come to believe that Lysander Spooner’s attack on the state on that basis is weak, it is still worth reading his 1870 pamphlet The Constitution of No Authority, which describes the democratic state of being “a secret band of robbers and murderers.”

The economic and philosophical issues involved are more complicated than they may appear at first sight. For example, suppose that the state is far from the capitalist state but does prevent the installation of another state that would be even worse—or that it prevents the descent into violent anarchy, as Thomas Hobbes feared. Many politicians commenting on last week’s troubles seem to believe, strangely, that, hic et nunc, anarchy is a more pressing problem than tyranny. (In the Washington Post, David Ignatius even uses an oxymoron: “the Trump anarchists”!) The mob was in effect calling for more state power even if some of its participants may have been duped into believing the contrary.

Little exercise: Why is it easier to be duped on the political market than on ordinary economic markets?

And all this is not speaking of what sort of democracy Pelosi is referring to. If it is majoritarian democracy, which majority do specific electoral methods and institutions favor? What happens when the majority wants both A and non-A, as the paradox of voting and Arrow’s impossibility theorem show is unavoidable? If it is not majoritarian democracy, which minority rules? Does the specific sort of democracy used pursue an illusory “will of the people”? On these questions, economics and, in its wake, political science have had much to teach over the past few decades. (Many of my Econlog and Econlib pieces have been concerned with these issues.)

At any rate, it is not sufficient to simply assume that glorified individuals (“lawmakers”) voting laws thousands of pages long (without knowing what’s in them except for their pious labels and professed intentions) constitute a temple of democracy.

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Elections Are Not a Ruler’s Toy Nor a Sacred Panacea

Some Republican leaders have, at last, started to blame Mr. Trump for burning the bridges behind him after being fired by the electorate or, perhaps more exactly (nothing is grandiose in that presidency), for breaking what he thinks are his toys after he felt scolded. (Will he also scratch graffiti on the oval office desk?) This is more or less what the Wall Street Journal, a newspaper that tried to like Trump, argues, although more prudently, in two pieces: “A Bogus Dispute Is Doing Real Damage,” November 19, by columnist Peggy Noonan; and Lindsay Wise, “Some Republicans Call for Trump to Back Up Claims of Fraud,” November 20, 2020.

Yesterday, the Wall Street Journal reported on weekend tweets of Mr. Trump attacking the Republicans who have asked him to stop trying to subvert the election results (Catherine Lucey and Ted Mann, “Trump Continues to Challenge Election Results as Legal Options Dwindle,” November 22). Against the (Republican) governor of Maryland Larry Hogan, who had said that “We’re beginning to look like we’re a banana republic,” Trump tweeted that “Hogan is just as bad as the flawed tests he paid big money for!” Interestingly, this jab refers to a story revealed last week by the Washington Post, one of the newspapers that Mr. Trump used to blame as “enemies of the people.”

At the exact opposite end of endangering American democracy to serve one’s political self-interest, lies the danger of sacralizing it. In the piece linked to above, journalist Lindsay Wise reports about Rep. Liz Cheney (R., Wyoming):

Ms. Cheney, the top ranking Republican woman in the House, said that if Mr. Trump can’t stand up his fraud claims and show they would tip the election in his favor, he should “fulfill his oath to preserve, protect and defend the Constitution of the United States by respecting the sanctity of our electoral process.”

In a classical-liberal perspective, nothing is sacred about ballots. They just need to be cast by eligible voters and be counted correctly. Perhaps this is what Rep. Cheney wanted to emphasize by speaking about the sanctity of the process.

In the mind of populists (as I and other analysts define them), elections are supposed to reveal the will of the people, and they blame the electoral process if it doesn’t achieve that. In reality, the electoral process cannot reveal the will of the people, which is unknowable because it does not exist. It suffices for liberal democracy that the process deliver a good count of the votes cast by a majority or a plurality of the electorate. The populists have it exactly backward: they idolize democracy for what it cannot deliver and undermine its useful process.

We can understand that moral rules develop to support voting because it is an institution that often fosters prosperity and offers some protection against tyranny. Contemporary economists who have formalized this theory of morals include Friedrich Hayek and, in game-theoretic terms, Robert Sugden. But this does not mean that democratic voting is a sacred panacea.

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Elections Are Neither a Ruler’s Toy Nor a Sacred Panacea

Some Republican leaders have, at last, started to blame Trump for burning the bridges behind him after being fired by the electorate or, perhaps more exactly (nothing is grandiose in that presidency), for breaking what he thinks are his toys after he felt scolded. (Will he also scratch graffiti on the oval office desk?) This is more or less what the Wall Street Journal, a newspaper that tried to love Trump, argues, although more prudently, in two pieces: “A Bogus Dispute Is Doing Real Damage,” November 19, by columnist Peggy Noonan; and Lindsay Wise, “Some Republicans Call for Trump to Back Up Claims of Fraud,” November 20, 2020.

Yesterday, the Wall Street Journal reported on weekend tweets of Mr. Trump attacking the Republicans who have called him to stop trying to subvert the election results (Catherine Lucey and Ted Mann, “Trump Continues to Challenge Election Results as Legal Options Dwindle,” November 22). Against the (Republican) governor of Maryland Larry Hogan, who had said that “We’re beginning to look like we’re a banana republic,” Trump tweeted that “Hogan is just as bad as the flawed tests he paid big money for!” Interestingly, this jab refers to a story revealed last week by the Washington Post, one of the newspapers that Mr. Trump used to blame as “enemies of the people.”

At the exact opposite end of endangering American democracy to serve one’s political self-interest, lies the danger of sacralizing it. In the piece linked to above, journalist Lindsay Wise reports about Rep. Liz Cheney (R., Wyoming):

Ms. Cheney, the top ranking Republican woman in the House, said that if Mr. Trump can’t stand up his fraud claims and show they would tip the election in his favor, he should “fulfill his oath to preserve, protect and defend the Constitution of the United States by respecting the sanctity of our electoral process.”

In a classical-liberal perspective, nothing is sacred about ballots. They just need to be cast by eligible voters and be counted correctly. Perhaps this is what Rep. Cheney wanted to emphasize by speaking about the sanctity of the process.

In the mind of populists (as I and other analysts define them), elections are supposed to reveal the will of the people, and they blame the electoral process if it doesn’t achieve that. In reality, the electoral process cannot reveal the will of the people, which is unknowable because it does not exist. It suffices for liberal democracy that the process deliver a good count of the votes cast by a majority or a plurality of the electorate. The populists have it exactly backward: they idolize democracy for what it cannot deliver and undermine its useful process.

We can understand that moral rules develop to support voting because it is an institution that often fosters prosperity and offers some protection against tyranny. Contemporary economists who have formalized this theory of morals include Friedrich Hayek and, in game-theoretic terms, Robert Sugden. But this does not mean that democratic voting is a sacred panacea.

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Is Modern Democracy So Modern and How?

The Decline and Rise of Democracy, a new book by David Stasavage, a political scientist at New York University, reviews the history of democracy, from “early democracy” to “modern democracy.” I review the book in the just-out Fall issue of Regulation. One short quote of my review about the plight of modern democracy in America:

[Stasavage] notes the “tremendous expansion of the ability of presidents to rule by executive order.” Presidential powers, he explains, “have sometimes been expanded by presidents who cannot be accused of having authoritarian tendencies, such as Barack Obama, only to have this expanded power then used by Donald Trump.” We could, or course, as well say that the new powers grabbed by Trump will likely be used by a future Democratic president “who cannot be accused of authoritarian tendencies,” or perhaps who might legitimately be so accused.

The book is a book of history and political theory, not a partisan book. But the history of democracy has implications for today. An interesting one is how bureaucracy typically helped rulers prevent the development of democracy. Another quote from  my review—Stasavage deals with imperial China and I compare with today’s America:

At the apogee of the Han dynasty, at the beginning of the first millennium CE, there was one bureaucrat for every 440 subjects in the empire. … In the United States, which is at the low end of government bureaucracies in the rich world, public employees at all levels of government translate into one bureaucrat for 15 residents (about one for 79 at the federal level only).

If you read my review in the paper version of Regulation, beware. I made an error in my estimate for the federal bureaucracy and the printed version says “37” instead of “79”. It is corrected in the electronic version. Mea culpa.

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Should we trust elite opinion?

Bryan Caplan did a recent post discussing Garett Jones’s new book, which advocates “10% less democracy”. I have not read the book, but this caught my eye:

7. Garett’s chapter on the EU greatly surprised me.  Given his vocal skepticism about low-skill immigration in general and refugees in particular, I expected him to concede that the EU needs at least 10% more democracy.  Instead, he argues that the EU is underrated.  The European Central Bank works well, and “while the EU may get press for making it illegal to put little unmarked bottles of olive oil on your restaurant table, it’s reasonable to believe that joining the EU helps your nation’s economy overall.”  The EU, in Garett’s phrase, is a “pro-market club.”  While he concedes that fear of immigration partially motivated Brexit, the untold story is that the UK didn’t benefit much from the EU because the UK is one of the most pro-market members of the club.

Not only does the ECB not “work well”, it’s been an almost unmitigated disaster.  It is an almost perfect example of project that reflected the wishes of elite technocratic opinion, but which turned out very badly.  ECB policy largely explains the Eurozone depression of 2008-13.

Sam Bowman directed me to another example.  Elite opinion discouraged mask use in the early stages of the epidemic, while uninformed people (like me) asked why masks were effective for medical workers but not average people.  We now know that the common sense view was correct and the elite view was wrong:

It is plausible that elite opinion is better, on average, than the average view.  But that does not necessarily imply that we’d be better off with less democracy, as there is no guarantee that the reduction in democracy would be filled with the right sort elite opinion.  After all, dictatorships have close to 100% less democracy, and most certainly don’t rely on elite opinion.  So I remain agnostic but a bit skeptical of the claim that less democracy would be better.

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