In These Times: Who’s Afraid of Democracy? (answer: free-market conservatives)

IMPORTANTE for socialist-leaning DU'ers...

Cross-posted from Editorials & Other Articles - originally posted by marmar here

Who’s Afraid of Democracy?

Believing that “people are rational as consumers and irrational as voters,” many conservatives would favor free markets without democracy
By Christopher Hayes

Behavioral economists at UC San Diego recently conducted a study in which tokens were distributed among experimental subjects, with a few getting a concentrated chunk of the wealth and a majority getting little. They offered the “poor” subjects the opportunity to pay a price to take money away from the rich. The catch was that rather than being redistributed, the money would simply disappear. Economic orthodoxy predicts that few would snap at the chance, since they’d be paying for something that would confer no direct benefit. But they did. In spades.

Though only one data point, it suggests that people have a profound sense of economic fairness, that we are all, more or less, intuitive socialists. As far back as Edmund Burke, conservatives have suspected as much and feared democracy for that very reason. Read James Madison in the Federalist Papers and it’s clear that many of the Constitution’s undemocratic elements were designed to prevent the expropriation of wealth from an outnumbered elite.

This central tension between laissez faire capitalism and the redistributive whims of a democratic electorate isn’t discussed much. But it can poke through the surface during moments of clarity, such as the last election, when minimum wage increases passed in every state—red and blue—where they were on the ballot.

For Bryan Caplan, an economist at George Mason University and author of The Myth of the Rational Voter: Why Democracies Choose Bad Policies, the minimum wage is an iconic example of the economically backwards policies favored by the foolish masses. “In theory,” he writes, “democracy is a bulwark against socially harmful policies, but in practice it gives them safe harbor.” Examining this “paradox” takes up the rest of the book, but his explanation is pretty simple: Voters are crazy.

The Myth of the Rational Voter is best understood in the context of a long-standing academic debate over whether democracy works. It’s a question that has two related, but distinct, sub-components: Do democracies produce optimal policies for its citizens? And do democracies produce policies that accurately reflect the will of the majority?

The most sanguine observers say “yes” on both counts. But given that surveys consistently show that voters are distressingly ignorant about both the rudiments of policy (whether we spend more on foreign aid or social security) and politics (how many senators each state has), it’s a difficult case to make. Another strain of thought is the so-called Public Choice school, which answers “no” to both questions. Public Choice theorists tend, like Caplan, to be free market enthusiasts and argue that democracies inevitably lead to bloated bureaucracies, trade protectionism and inefficient subsidies. These sub-optimal economic policies occur not because of their widespread popularity, but rather because the state’s agenda is so easily manipulated by special interests looking to make easy money by regulating their competitors or getting their hands on taxpayer dollars.

Caplan disagrees: Democracy fails to produce good policies precisely because it reflects the will of the majority. Or, as H.L. Mencken once put it: “Democracy is the theory that the people know what they want and deserve to get it good and hard.”

What the people want, according to Caplan, is economic bollocks. To establish this point, he devotes a chapter to the Survey of Americans and Economists on the Economy (SAEE). Conducted in 1996, the survey asked economists and members of the general public questions about the economy, and found a divergence of opinion on almost every principle of policy: whether taxes, immigration and foreign aid are major or minor contributors to the nation’s economic health, whether “business profits are too high,” and whether “downsizing” is hurting the economy.

...(snip)...

Caplan’s willingness to embrace the darkness, however, is what makes this book so important: It articulates in lurid detail the obscene id of Chicago-school, Grover-Norquist-style, free market fundamentalism (a term Caplan spends a chapter rebutting). Given a choice between democracy without free markets or free markets without democracy, many conservatives would gladly choose the latter. Hence Milton Friedman advising Augusto Pinochet in Chile and the Bush administration’s support of a coup in Venezuela.

And the book’s manifest elitism is not fringe. It is blurbed by economist Alan Blinder, who advised President Clinton, and N. Gregory Mankiw, who headed the Council of Economic Advisors under George W. Bush. Over the last 30 years, conservatives have made political hay by railing against liberal “elitists” who want to substitute the judgment of faceless bureaucrats, activist judges and pointy-headed intellectuals for that of the common man. Yet if you got some prominent conservatives off the record—after plying them with a few drinks—I bet more than a few would agree with Caplan: Voters are fools. .....(more)

http://www.inthesetimes.com/article/3185/whos_afraid_of_democracy