Is Democracy a Mistake?

People take it for granted that Democracy is the natural and right form of Government.  If it were a mistake, then modern Government in the West could be discredited too.

In a previous post I looked at how we ended up with political systems based on universal suffrage (i.e. democracy = everybody has a vote).  Voters elect representatives to run governments, supposedly on behalf of the people.  It is increasingly clear that representatives ignore voters’ wishes.  Instead, they combine to form a Uniparty to do what donors and vested interests reward them for doing.  I suggested getting rid of elected representatives.  Instead, laws and repeal of laws, taxes, war or peace could be voted on directly by citizens via the internet (or even in person once a year?).

Only when popular support for an idea reaches 80% of the electorate have American representatives generally considered bending to the popular will.  We have such a situation in the US Senate now.  Popular support for allowing only US citizens to vote is around 85%.  Will the senate defy the people to let donors rig federal elections?

We shall see.  In any case, if the problem is simply that elected representatives betray voters, that is no reason to suppose that democracy itself is a mistake. But it may be.

The historical record is the record of organised states ruled by literate authoritarian elites. Literacy – writing – developed to keep state tax records.  So-called uncivilised, ‘barbarian’, societies may have been freer and healthier than agrarian states.  History is the study of the written word. So, history has next to nothing to say about such non-state societies.

History records the political systems of taxation-based states.  Overwhelmingly the most common system has been hereditary absolute monarchies.  One man is vested with theoretically absolute power.  The ruler could help himself to the belongings, womenfolk, lands etc. of his subjects – subject to the need to keep powerful supporters of the regime loyal.  Such societies tend to stagnation rather than innovation.  The strongest monarchies, for example Ancient Egypt, produced the longest periods of stagnation.

Innovation depends on people being free – able to use their own persons and possessions to do that which the authorities would forbid.  Monarchies hated and tried to forbid change because it creates uncertainty about their future control of societies’ resources.

People have been freer in republics.  Their inhabitants therefore account disproportionately for humanity’s achievements and progress.  History focuses on short periods of republican achievement such as in Classical Greece, the Roman Republic, Renaissance Italy and in the Dutch, English and American republics (acknowledging Britain from 1688 to have been a republic – albeit with a hereditary head of state).

Monarchies tend not to run systems which their subjects or slaves from being robbed and abused (by the King).  But republics do.  They depend on popular support to maintain their independence, not least militarily.  Therefore, they have to offer ‘the people’ adequate legal protections of person and possessions - in other words, freedom.    

What is required to maintain a republic’s independence?  The answer, as with any state, has been the ability to win wars.  Quite sensibly, the people who were granted a voice – a vote – in public decision-making were those who could help the republic win wars. 

In ancient Greece, war boiled down to battles between hoplite infantrymen.  Citizen hoplites were men who could bring their own shields and spears into battle.  Up to half of men in a typical Greek city were small landholders who could afford to fight as hoplites, so their opinions counted. 

A few wealthier people could afford horses which gave them a bigger say because they could serve as cavalry – for example the equites (horseman) class in Rome.  But horses ate so much more than men that very few men could afford them.  On the other hand, many free men were too poor to equip themselves for battle.  So, they generally did not count in making political decisions, almost all of which were about war.  Ancient republics almost never allowed an equal say for all citizens.  There was only rarely, and briefly, universal suffrage (democracy). The norm was various forms of oligarchy (rule by the few).      

By retaining universal suffrage (democracy) for two centuries, the Athenian Republic was the principal and longest lasting exception to the general rule.  Athens had rich silver mines with which to maintain the state and pay for a big navy.  And it had a great deal of trade which needed protection.  It needed rowers to power warships.  Poor Athenians could therefore contribute to the war effort as rowers.  Thus, they had military value and, not coincidentally, a voice in politics as equal participants.

In more recent republics, political power was restricted to wealthier people.  They could pay the taxes needed to support professional gunpowder-based armies and navies.  This led to voters comprising a small minority of populations in the early modern, say 1600-1850, period in those few European countries that were not absolutist monarchies.

From 1688 to the late 1800s, Britain had a very restricted voter franchise.  It was far from a democracy.  It would not achieve true universal (one citizen one vote) suffrage until just a hundred years ago.  Nevertheless, it was an extraordinarily successful society.  It enjoyed freedom from most kinds of state oppression, a high degree of trust in society and rapid technical and material progress.

Would Britain have been even more successful if everybody had had the vote? That depends on whether or not the majority of the population in Britain had the same beliefs and behaviours as the small voting minority.  Subsequent history suggests that they did not. Granting the vote to everybody earlier could have delayed or even reversed Britain’s progress in the eighteenth and nineteenth centuries. 

Why might this be and what is the evidence?

Prosperity and Time Preferences of Individuals

I often quote Adam Smith’s saying from his book ‘Wealth of Nations’ (1776) explaining that to achieve prosperity all that is needed is ‘easy taxes and a tolerable administration of justice’.  In other words, low taxation and effective legal protection of personal freedom and ownership of possessions automatically leads to growing living standards.  

He explained in his famous description of ‘the hidden hand’ that, in a free society, producers’ incentives lead them to improve their operations and thus automatically to promote prosperity - so long as the state does not regulate or tax excessively.  It is the case that only societies with some degree of economic freedom have achieved prosperity.  The fact that periods of prosperity in history have been few and fleeting tells us how rarely there has been much freedom.

Liberty, most clearly economic liberty, enables human flourishing.  Human flourishing is the desired end goal of any well-intentioned person.  It means that as many people as possible are free to do what most people in fact love doing anyway. This is a spiritual as well as an economic goal. 

Indeed, it may be doubted that human beings can cope with abundance if they have not earned it by freely cooperating with others.  If human beings are at all comparable to mice, the Universe 25 experiment (see an earlier post) suggests they cannot survive, any more than mice can, the free lunch fantasy at the core of socialism.

People love co-operating with other people to create valuable goods or services to exchange with other people.  Over time the complexity and productivity of social exchange continually increase.  People always want to improve their lives.  Libertarians or Classical Liberals think they should be free to do so.  Socialists, progressives and assorted totalitarians do not.

What characteristics should people have to participate most effectively in a rapidly progressing society such as Britain used to be?  The answer is that they should have what economists of the Austrian School (the economics wing of Classical Liberalism) call Low Time Preference, by which they mean the ability to defer gratification and to plan for the future. 

A person with Low Time Preference is more willing to make sacrifices in the here and now.  He will delay gratification to achieve a greater return in the future.  He will be willing to save money rather than spending it immediately.  He will make long term plans, including plans to invest savings to increase future output, thus achieving higher but more distant returns.

In contrast, a High Time Preference individual will be less able to promote prosperity because his resources are likely to be consumed rather than invested.  He wants instant, if passing, gratification.  It is likely that he will be much less aware of basic economic and commercial facts.  It is likely that such a person will be less intelligent, or at least show less foresight.

He can still be a perfectly useful member of society.  And he will certainly benefit from the higher wages, and increased mutual and charitable provision, made possible (though he may well not understand this) by the patient foresight of Low Time Preference people. 

Unlike them, he will not become wealthy because he won’t or can’t save or plan for the future.  Without some wealth, in Britain in the eighteenth and nineteenth centuries, as we have seen, he would not generally be entitled to vote. 

Perhaps unsurprisingly, studies conducted on young children to test their ability to delay gratification show a clear link between delaying gratification and success as an adult.

Democracy: The Problem

Up until the early 20^th century Britain, and latterly the rest of the West, had rapidly expanding economies made possible by high rates of saving and investment, low taxes and limited regulation, enabling competitive and prosperous product and labour markets. 

This system rewarded Low Time Preference people for innovating and investing.  Governments were much, much smaller.  They took roughly a tenth of their societies’ wealth in taxes, leaving plenty for private re-investment.  Low Time Preference Voters made up a majority of voters in property-based franchises. They did not want big Government.

Now half or more of societies’ resources are taken away on behalf of increasingly corrupt and malign deep-state and financial vested interests.  Such tribute can only be garnered via heavy taxation and irresponsible borrowing.  The shift to big government was enabled by getting rid of property-based franchises with few voters, and adopting universal suffrage.

Hoppe, in his book ‘Democracy, the God that Failed’, shows how each progressive extension of voting rights to less and less affluent men increased the share of the electorate voting for socialist parties in European countries in the nineteenth and early twentieth centuries. 

It is likely that there has always been a majority of High Time Preference individuals.  Therefore modern extensions of the voting franchise would reach a tipping point.  Less intelligent, informed and self-disciplined people became a voting majority, after centuries of having no say at all.

The Rest is History (the name, by the way, of an excellent history podcast which runs to very many witty and informative episodes).  Gradually, but inexorably, taxation increased to fund ‘benefits’ at the expense of owners of, and investors in, productive assets.  Direct taxation came in.  Henceforth the taxman had his hand in the pockets of every productive person, and no longer had to depend solely on indirect taxation such as tariffs or sales taxes.

Over time, habits and manners consistent with thrift, foresight and more civilised ways of life, i.e. Low Time Preference behaviours, have been penalised by modern government.  Meanwhile the state’s de-civilisational encouragement of short-term, High Time Preference behaviour proceeds apace.  

State interventionists tend to be keen interventionists in other people’s countries too. This paved the way for self-interested, elite promotion of pointless warfare.  Britain and other Western countries had become very high trust (i.e. ‘civilised’) societies during the preceding Classical Liberal era of small government.  Trusting men were led to sacrifice their lives as well as their fortunes to the socialist welfare/warfare state. 

To fund wars countries abandoned the link between currencies and precious metals.  This is why our money, and therefore our wages and savings, tends to lose value constantly.  This is more bad news for the beleaguered Low Time Preference people, but good news for officials and financialists who create more money out of thin air at no cost.

It is clear that generations of state growth have produced lower-trust, less-civilised, societies.  At least it may mean that elite attempts to lure young men into senseless slaughter will be widely resisted or, better still, ignored.  But the state has de-incentivised constructive behaviour and rewarded parasitic dependency at all levels.

Can We Mitigate Democracy?

The democratic pressure to expand the state, at the expense of families and productive people in general, eventually leads to falling living standards, and to falling state revenues.  If the state becomes unable to pay its supporters, a political crisis must occur at some point.

We might wonder if democracy can be mitigated sufficiently to avoid such a crisis.  It is unlikely that the electorate would support limiting the vote to people deemed to be productive, for example enfranchising only taxpayers, or people who are not dependent on state payments.  But people won’t vote to do away with their own votes.  And politicians oppose measures which shrink their importance and revenues.

To mitigate the failings of democracy, we might restore the Anglo-American tradition of enshrining in law individual rights with which the state cannot interfere.  Starting with the Magna Carta (1215) and running through the 1689 Bill of Rights in Britain, the American Declaration of Independence in 1776 and the US Constitution in 1788, legally protected rights have been asserted to protect citizens against state overreach.

It doesn’t bode well that in the UK the Magna Carta and the British Bill of Rights have largely been supplanted.  In England, Parliament was meant to be the guardian of Englishmen’s rights.  But democracy (universal suffrage) turned elections into tax-funded vote buying.

The Founding Fathers in America came up with a more rigorous definition of liberty in the US Bill of Rights (the name given to the first ten Amendments to the US Constitution, without which it would have been rejected), and an independent mechanism for defending it in the form of the US Supreme Court.  The point of the personal rights enumerated in the US Bill of Rights is that they cannot be overturned by the elected government.

As democratic government took hold, undesirable changes to the Constitution were nevertheless made, after lengthy political campaigns.  Until 1913 and the 16^th Amendment, the Constitution outlawed federal direct taxation.  This banned income taxes, inheritance taxes and capital gains taxes.  The Constitution had kept the federal government down to a mere 5% of the economy, funded largely by tariffs. 

Until the 17^th Amendment, the upper house of Congress, the Senate, was not elected.  The Senate was designed to give direct representation to the states, and not to voters.  Two senators were nominated by each state legislature, regardless of each state’s population size.  This unequal representation was intended to counter the influence of the bigger states’ electorates in the lower house, the House of Representatives.

Nevertheless, the American constitution has stood up well.  It has shown enough flexibility to allow for some progressive changes in public opinion.  But it has also retained a fundamental integrity in protecting personal protections against the state.  It is also the only political system which was explicitly designed to legally protect the citizen against the state, and to ensure the sovereignty of the people over government. 

Even in the last years of the Biden Administration, there were encouraging constitutionalist Supreme Court decisions, including SEC vs Jarkesy, the overturning of the Chevron Deference and of Roe vs Wade.  These decisions prevent the permanent bureaucracy from introducing regulations without congressional authority, and from running its quasi-judicial courts and from levying fines at its discretion. 

The effect has been to strengthen the Constitution’s allocation and separation of powers to and between the branches of the federal government, and to and between the federal and state governments.  Despite the messiness of it all, constitutionally assured rights have worked better to protect liberty.

Is it a coincidence that it is also the United States, pretty much alone among western states, that has elected an anti-establishment, populist government dedicated to reining in government overreach, and to countering New World Order, Globalist, Davos, UN and Bankster attempts to drive us into a miserable totalitarian future?

Perhaps Britain should consider returning to its own tradition, defining and enshrining the principles of liberty in a formal constitutional settlement.