On Sun, 7 Sep 1997, Steve Schear wrote:

Many, beginning with de Toquivelle, have noted that democracy brings with it the unhappy possibility of a tyranny of the majority. The reasons for this shortcoming are closely tied to the decision of whom within the democracy receives the franchise and how in a representative democracy officeholders are elected.

I don't think it is so much of the franchise as to the problem of whoever the enfranchised are voting themselves largess at the public trough (also noting how few of the franchised actually exercise the right today). If no one would consider voting for subsidies, the country is safe. As soon as the first subsidy is passed, a mob will form to lobby for a similar one to benefit them. This will occur even if the enfranchised group is small - absolute power corrupts absolutely, even when it is every citizen who can wield it, or an oligarchy. Moreover, property ownership does not make for any better selection except that it is probable that one of your ancestors had to acquire wealth. Then the property owners simply vote to prevent transfer of property or some other means of freezing the franchise, and can still cause all the problems of tyranny. It would be preferable that everyone wanting to vote have to pass a test which had as a major component the fate of all democracies that use majority power to destroy minority rights and to vote themselves subsidies. At this point, the democratic right to commit societial suicide at least becomes an informed decision. Democracy is as tyrannical as any other system if rights aren't respected. In those cases where limited government might have to make a decision concerning all, and there is time to debate the issue, democracy (either representative or direct) is the most just method.

The darkest warnings of democracy's critics are being furfilled, precisely because of entitlement programs that already exist, which are driving the federal government into an abyss of debt. Touching the big entitlement programs - the ones available to the middle class - is "political suicide."

You should finish the story (or is there a Part III coming out)... Democracies bankrupt themselves because this voting of largess eventually turns into a pyramid scheme that collapses when there is no one left creating wealth, only those trying to redistribute it. After wealth can no longer be distributed, the attempt is made to transfer more power to government (because they can't believe that the reason for the problem is their own greed - it must be the Jews, Corporations, Immigrants, Right Wing Radicals, Gold Hoarders - pick your favorite group). And we end up back with a tyranny - from a totalitarian democracy, to a dictatorship when everything breaks down. All it will take is one stock market crash (read: correction that restores dividend yields and price-to-book values to historic normalcy) - and the following recession to bankrupt the pay-as-you-go government (watch for 20%+ interest rates on government securities during a deflation!). The unemployed riot demanding something other than scrip and seinors refuse to pay taxes unless their social security is in cash - volia, we have marshall law. Remember what Roosevelt got away with before the current method of expressing displeasure - burning your city to the ground - became popular. Probably before the congress is through investigating the campaign irregularities in the 1996 elections. --- reply to tzeruch - at - ceddec - dot - com ---

At 6:16 PM -0400 9/8/97, nospam-seesignature@ceddec.com wrote: On Sun, 7 Sep 1997, Steve Schear wrote:

...

Many, beginning with de Toquivelle, have noted that democracy brings with it the unhappy possibility of a tyranny of the majority. The reasons for this shortcoming are closely tied to the decision of whom within the democracy receives the franchise and how in a representative democracy officeholders are elected.

I don't think it is so much of the franchise as to the problem of whoever the enfranchised are voting themselves largess at the public trough (also noting how few of the franchised actually exercise the right today). If no one would consider voting for subsidies, the country is safe. As soon as the first subsidy is passed, a mob will form to lobby for a similar one to benefit them. This will occur even if the enfranchised group is small - absolute power corrupts absolutely, even when it is every citizen who can wield it, or an oligarchy.

Your mention of oligarchy helps introduce Part III, which like Part I is excerpted from the Soverign Individual. -------------------- The conventional way to treating the role of democracy assumes that it brings violence-using and violence-producing enterprises "increasingly under the control of their customers. This is certainly the politically correct conclusion. But is it true? ...democratic governments typically spend only a bare fraction of their total outlays on the service of protection, which is their core activity. In the United States, for example, state and local governments spend just 3.5 percent of their total outlays on the provision of police, as well as courts and prisons. Add military spending, and the fraction of revenues devoted to protection is still only about 10 percent. Most democracies run chronic deficits. This is a fiscal policy characteristic of control by employees. Governments seem notably resistant to reducing the costs of their operations. An almost universal complaint about contemporary government worldwide is that political programs, once established, can be curtailed only with great difficulty. ...you would look in vain for hints of competitive influences on tax rates according to which government services are priced. Advocates of lower taxes sometimes have argued that government revenues would actually increase because rates previously had been set so high that they discouraged economic activity. They did not argue that because tax rates in Hong Kong were only 15 percent, rates in the United States or Germany must be no higher than 15 percent. To the contrary. Tax debates have normally assumed that the trade-off facing the taxpayer was not between doing business in one jurisdiction or doing it in another, but between doing business at penal rates or taking a holiday. You were told that productive individuals subject to predatory taxation would walk away from their in-boxes and go golfing if their tax burdens were not eased. Customers would scream bloody murder if a telephone company attempted to charge for calls on the same basis that income taxes are imposed. Suppose the phone company sent a bill for $50,000 for a call to London, just because you happened to conclude a deal worth $125,000 during a conversation. Neither you nor any other customer in his right mind would pay it. But that is exactly the basis upon which income taxes are assessed in every democratic welfare state. Government in many respects appears to be run for the benefit of employees. For example, government schools in most democratic countries seem to malfunction chronically and without remedy. If customers truly were in the driver's seat, they would find it easier to set new policy directions. Those who pay for democratic government seldom set the terms of government spending. Instead, government functions as a co-op that is both outside of proprietary control and operating as a natural monopoly. Prices bear little relation to costs. The quality of service is generally low compared to that in private enterprise. Customer grievances are hard to remedy. In short, mass democracy leads to control of government by its "employees." But wait...there are many more voters than there are persons on the government payroll. How could it be possible for employees to dominate under such conditions? The welfare state emerged to answer exactly this quandary. Since there were not otherwise enough employees to create a working majority, increasing numbers of voters were effectively put on the payroll to receive transfer payments of all kinds. In effect, the recipients of transfer payments and subsidies became pseudogovernment employees who were able to dispense with the bother of reporting every day to work. When the magnitude of coercive force is more important than the efficient deployment of resources, as was the case prior to 1989, it is all but impossible for most governments to be controlled by their customers. When returns to violence are high and rising, magnitude means more than efficiency. Larger entities tend to prevail over smaller ones. How did inefficiency fostered by democracy become a factor in its success during the Age of Violence? The key to unraveling this apparent paradox lies in recognizing two points: 1. Success for a sovereignty in the modern period lay not in creating wealth but in creating a military force capable of deploying overpowering violence against any other state. Money was needed to do that, but money itself could not win a battle. The challenge was not to create a system with the most efficient economy or the most rapid rate of growth, but to create a system that could extract more resources and channel them into the military. By its nature, military spending is an area where the financial returns per se are low or nonexistent. 2. The easiest way to obtain permission to invest funds in activities with little or no direct financial return, like tax payments, is to ask for permission from someone other than the person whose money is coveted. One of the ways that the Dutch were able to purchase Manhattan for twenty-three dollars' worth of beads is that the particular Indians to whom they made the offer were not the ones who properly owned it. "Getting to yes," as the marketing people say, is much easier under those terms.... In fact, we would be far more persuasive if we could rely instead upon the consent of several people you do not even know. We could hold an ad hoc election, what H. L. Mencken described, with less exaggeration than he might have thought, as "an advanced auction of stolen goods." And to make the example more realistic, we would agree to share some of the money we collected from you with these anonymous bystanders in exchange for their support. Why Customers Could Not Dominate Those who paid for "protection" during the modern period were not in a position to successfully deny resources to the sovereign, even acting collectively, when doing so would simply have exposed them to being overpowered by other, possibly more hostile states. This was an obvious consideration during the Cold War. The customers, or taxpayers, who bore a disproportionate share of the cost of government in the leading Western industrial states were in no position to refuse to pay hefty taxes. The result would have been to expose themselves to total confiscation by the Soviet Union or another aggressive group capable of organizing violence. Industrialism and Democracy In 1760, the Polish national army comprised eighteen thousand soldiers. This was a meager force compared to the armies commanded by rulers of neighboring Austria, Prussia, and Russia, the least of whom could control a standing army of 100,000 soldiers. In fact, the Polish national army in 1760 was small even in comparison with other units under arms within Poland. The combined forces of the Polish nobility were thirty thousand men. If the Polish king had been able to interact directly with millions of individual Poles and tax them directly, rather than being limited to extracting resources indirectly through the contributions of the powerful Polish magnates, there is little doubt that the Polish central government would have been in a position to raise far more revenues, and thus pay for a larger army. ...the military disadvantage of failing to circumvent the wealthy and powerful in gathering resources was decisive in the Age of Violence. Within a few years, Poland ceased to exist as an independent country. It was conquered by invasions from Austria, Prussia, and Russia, three countries with armies each of which was many times bigger than Poland's small force. In each of those countries, the rulers had found paths to circumvent the capacity of the wealthy merchants and the nobility to limit the commandeering of their resources. During the Industrial Age prior to (the fall of the Belin Wall), democracy emerged as the most militarily effective form of government precisely because democracy made it difficult or impossible to impose effective limits on the commandeering of resources by the state. Not only did (citizens) face the aggressive menace of Communist systems, which could produce large resources for military purposes since the state controlled the entire economy. But true taxpayer control of government was also impractical for another reason. Millions of average citizens cannot work together effectively to protect their interests. Because the obstacles to their cooperation are high, and the return to any individual for successfully defending the group's common interests is minimal, millions of ordinary citizens will not be as successful in withholding their assets from the government as will smaller groups with more favorable incentives. Other things being equal, therefore, you would expect a higher proportion of total resources to be commandeered by government in a mass democracy than in an oligarchy, or in a system of fragmented sovereignty where magnates wielded military power and fielded their own armies, as they did everywhere in early-modern Europe prior to the eighteenth century. Thus a crucial though seldom examined reason for the growth of democracy in the Western world is the relative importance of negotiation costs at a time when returns to violence were rising. It was always costlier to draw resources from the few than from the many. A relatively small, elite group of rich represent a more coherent and effective body than a large mass of citizens. The small group has stronger incentives to work together. It will almost inevitably be more effective at protecting its interests than will a mass group. And even if most members of the group choose not to cooperate with any common action, a few who are rich may be capable of deploying enough resources to get the job done. To summarize, the democratic nation-state succeeded during the past two centuries for these hidden reasons: 1. There were rising returns to violence that made magnitude of force more important than efficiency as a governing principle. 2. Incomes rose sufficiently above subsistence that it became possible for the state to collect large amounts of total resources without having to negotiate with powerful magnates who were capable of resisting. 3. Democracy proved sufficiently compatible with the operation of free markets to be conducive to the generation of increasing amounts of wealth. 4. Democracy facilitated domination of government by its "employees," thereby assuring that it would be difficult to curtail expenditures, including military expenditures. 5. Democracy as a decision-rule proved to be an effective antidote to the ability of the wealthy to act in concert to restrict the nation-state's ability to tax or otherwise protect their assets from invasion. Democracy became the militarily winning strategy because it facilitated the gathering of more resources into the hands of the state. Compared to other styles of sovereignty that depended for their legitimacy on other principles, such as the feudal levy, the divine right of kings, corporate religious duty, or the voluntary contributions of the rich, mass democracy became militarily the most potent because it was the surest way to gather resources in an industrial economy.