Are Greedy Voters Undermining Democracy?

Sometimes I think people on the hard economic right live on a different planet.

The full post title at Cato is Are Short-Sighted Politicians (and Greedy Voters) Undermining Democracy?

The Cato article links to another article by Kevin Hasset (the guy who wrote DOW 36,000!) titled “Does Economic Success Require Democracy?” – His conclusion: “Sadly, no. In fact, the politically unfree countries are enjoying more economic growth than the politically free ones.”

Cato describes Hasset’s analysis as follows:

he wonders whether democratic regimes sow the seeds of their own destruction (or at least create for themselves a competitive disadvantage) by enabling people to seize unearned wealth through the political process

Hasset himself states it thusly:

But being unfree may be an economic advantage. Dictatorships are not hamstrung by the preferences of voters for, say, a pervasive welfare state.

So economic growth is more important than freedom. Growth is more important than democracy. Is that where the hard economic right is coming from?

For years I’ve been looking for a way to describe what I fear about the Bush/Rove/Cheney/Delay crew without falling afoul of Godwin’s law. I don’t simply think of them as fascists - I consider that simplistic and partially inaccurate. But these economics articles are giving me a clue.

What the Banana Republicans want is a state that creates wealth, and if the rights of the citizens have to be curtailed by authoritarian mechanisms in order for that to happen, that’s too bad. I think I get it now.

There is of course a major logical hole in that hard-right analysis, which is this: the median does not equal the mean. When you look only at raw growth numbers, you are looking at the mean, which includes the vast growth that occurs in the top tiers of the wealthy in most of the expansions they are talking about. I wonder what all these charts would look like if they were adjusted to look at median growth for the majority of the population. Or how would these charts look if you took the top 1% out of the picture and looked at the remaining 99%?

I’m not slamming the top 1% and I don’t envy them. My point is that “growth” which doesn’t help 99% of the population is growth I don’t care much about.

A better analysis would look at how wealthy the vast majority of persons in the society are, not just the mean average numbers. As the old saying goes, if Bill Gates walks into a bar with 99 other patrons, he raises the mean net worth of eveveryone into the bar to $400,000,000. Of course, that doesn’t mean anything to the 99 guys who’s personal net worth is more like $40,000.

Anyway, I just love that post title. I think I shall frame it.

His “analysis” is full of idiocy.

As Mathew Yglesias points out, the set of democratic, free countries is heavily weighted toward countries that are already rich. Most dictatorships are poor (or developing, if you prefer). Go figure, it’s harder to grow a trillion dollar economy by x% than it is to grow a billion dollar economy by the same amount.

There is literally no merit to what he is saying.

You’ve made some awesome posts recently, Sharpe, bravo! I don’t have the time or energy to respond as i once did.

I’ll say though that i think that Hasset’s basic premise is wrong; authoritarian countries are universally 3rd and “2nd” world nations, that are growing because of the emerging market miracle - not because of having authoritarian regimes. But what’s suprising to many is that authoritarianism and economic growth are NOT completely entangled, mainly because Communist ideology was economic first and foremost and so the great enemy ideology of the 20th century resulted in economic stagnation throughout every regime that practiced it, leading to the (perhaps unfortunatley naive) conclusion that freedom and economic growth were the same thing.

But i think you’re wise in perceiving a distant cloud on the horizon of conservative thought. To these sorts like Hasset, wealth is the end and the means. Everything else is just cake.


None of the above countries are rich, yet they are Democracies.

United States
United Kingdom

All of the above countries are rich (in fact, they are the top 1-5 by GDP in 2003) and they are all Democracies.

China is #6, followed by Italy, Canada, Mexico, and Spain.

So out of the top 10 we’ve got 9 democracies. In other words Dirt, your point isn’t half as clever as you’d like to think.

Does having an Empire still entitle you to the Democratic label? If Mexico is so damn rich, why are so many people crossing the border to the USA? Why is the drug trade so damn lucrative that Drug cartels are actually waging war against a standing army to protect their drug routes? As the original poster alluded, there’s no clear correllation between wealth and democracy. Spain has only been a Democratic country for a little over 22 years. Unemployment is pretty high in France. Somebody is making the money I guess.

I’m really not sure what rhetorical points you imagine you’re scoring here Dirt.

Hasset’s entire premise is that dictatorships result in higher levels of GDP growth. What he ignores is that dictatorships are by and large primitive banana republics with relatively small GDPs to begin with.

It’s just a fact of economics that it’s easier to show larger growth when you’re small. If your GDP is something on the order of say 100 billion dollars, then 10 percent growth looks like 10 billion dollars - which isn’t that big a deal. If your GDP is something on the order of 10 trillion dollars, then 10% growth is another trillion which is much harder to pull off.

Hasset conveniently ignores all of this (or rather he mentions it in passing and then shrugs it off). By and large democracies are stable, mature economies that are past the rapid growth stage you undergo in the process of development.

Christ this is all basic stuff, did I really have to spell it out for you?

Once you establish your economic power base, with you at the top, human nature tends to dictate that you’ll say or do just about anything to cement your position in the popularity contest.

At any rate, Hasset’s characterization of a welfare state is disingenuous at best. What he should be asking is why a majority might see the welfare system as generally necessary. His complaint does not truly lie with the voting bloc, but with his inherent disagreement with its sentiments.

Arrow was able to show that no voting scheme can be devised that will create a government that has rational preferences, where rationality is defined precisely by Arrow as meeting a number of conditions. Democracy might be a form of government that many prefer to live under, but there is nothing theoretically compelling that suggests that it is the form of government that best reflects the underlying preferences of citizens. As a result, democracies will not necessarily outperform other types of mechanisms for preference aggregation as a route to economic prosperity. Democracies will not always win.

Here, he floats two interesting points. First, that an appointed representation would necessary know what’s best for the country. I would contend that he curiously sidesteps the problems of corruption and civil liberty violation, which is rampant in the examples he trots forth. There is no preference aggregation in China – not one that involves its citizens, at least. They do, however, have a broad array of public programs that include a welfare-like system.

Second, he creates a false dichotomy by implying that democracy is a provably self-sufficient system. He should know better than to make such dissembling suggestions. Anyone in his position understands that democracy is merely (and arguably) the most dynamic form of government that has been established thus far.

I think he’s in denial of the fact that he’s pushing a self-serving agenda. All that fancy chart tells me is that China has over a billion people it can employ to extract resources, create technology, and so forth. And that perhaps America’s and the majority of Europe’s economic growth has slowed down. Tying success to form of government should be an obvious causality problem.

Greedy voters don’t undermine Democracy.

People who don’t vote undermine Democracy.


Does having an Empire still entitle you to the Democratic label?


Sharpe, I know you’re very proud of your “Banana Republican” thing, but this is a blog post about another blog post by a crazy person. You’ve found an idiot on the internet, congratulations. I’ll top you, though, by referencing Dirt’s posts in this thread.

Edit: The blog post you initially mention is more positive regarding Caplan, who has the not-insane following to say about the issue:

When special interests talk, politicians listen and the rest of us suffer. But why do politicians listen? Social scientists' favorite explanation is that special interests pay close attention to their pet issues and the rest of us do not. So when politicians decide where to stand, the safer path is to satisfy knowledgeable insiders at the expense of the oblivious public.
This explanation is appealing, but it neglects one glaring fact. "Special-interest" legislation is popular.
Keeping foreign products out is popular. Since 1976, ... Americans who "sympathize more with those who want to eliminate tariffs" are seriously outnumbered by "those who think such tariffs are necessary." Handouts for farmers are popular. A 2004 ... Poll found that 58% agree that "government needs to subsidize farming to make sure there will always be a good supply of food." In 2006, ... over 80% of Americans want to raise the minimum wage. ... These results are not isolated. It is hard to find any "special interest" policies that most Americans oppose.
Clearly, there is something very wrong with the view that the steel industry, farm lobby and labor unions thwart the will of the majority. The public does not pay close attention to politics, but that hardly seems to be the problem. The policies that prevail are basically the policies that the public approves. ... To succeed, special interests only need to persuade politicians to swim with the current of public opinion.
Why would the majority favor policies that hurt the majority? ... The majority favors these policies because the average person underestimates the social benefits of the free market, especially for international and labor markets. In a phrase, the public suffers from anti-market bias.

This is wrong too(he seems to be poo-pooing the “social scientists”, but A) economics is a social science and B) If he understood a bit more political science he’d get that what he described is not counter to the existing political science consensus on why various bad for vast majority, good for a tiny minority measures get passed), but it’s not stupid. The average person doesn’t have an opinion on the social benefits of the free market, they get exposed to one well placed shill story or op-ed about the struggling family farm and get asked if the government should do something about it, and hell, why not? There’s no “Everyone but agribusiness” lobby to fund a response so people are ignorant of the issue entirely. Thus, “special interests pay close attention to their pet issues and the rest of us do not. So when politicians decide where to stand, the safer path is to satisfy knowledgeable insiders at the expense of the oblivious public.”

Ben, on the defects in democracy, I don’t actually disagree. I think I posted something a while back about that book called “Demosclerosis” which discussed the persistence of special interest graft and discussed things like the structural fact that there are no counter-lobbies to a lot of the special interest groups. Democracy does have its flaws. I happen to agree with the old saw “Democracy is the worst system of governence ever invented, except for all the others that have been tried.” (Please read that in a Leonard Nimoy voice to honor the greatness of Civ IV :O ).

As to cherrypicking blog posts, the one post is from the Cato Institute’s official blog -Cato is an institution that has a fair amount of credibility around here. The other post was written by the guy who wrote DOW 36,000! so maybe he is crazy, but the book in question was written by Caplan, whose ideas have been discussed on other sites as well, including Tyler Cowen’s Marginal Revolution

I don’t think I’m cherrypicking - I think these views do offer some insight into the worldview of a certain political faction of wealth worshipping free market political types. That’s really my point: I finally feel like I understand what the Rove/DeLay types are about: they believe that if we just remove all the impediments (labor laws, regulations, taxes, voters, civil liberties, basically everything but property rights) then the magic of the free market shall rain down plenitude upon us and we shall achieve Teh Capitalist Utopia (misspelling intentional). If democracy and the Constitution are in the way, well too fucking bad.

As to “Banana Republicans” I did not coin the term. I freely admit to having grabbed it from Kevin Drum of the Washington Monthly.

The ‘official blog of Cato’ is just linking to stories of interest, not endorsing the removal of civil liberties as an economic policy. And Caplan and Kasset are not the same person, the blog post was “Here’s a wacky theory” and then “Here’s another story of interest about loosely similar themes”.

Rove and Delay are about nothing more than regular old self-interest. They don’t believe that their policies will make America richer, they think their changes will make them and their cronies richer. Bush is not a very free-market president.

So the Cato Institute has “discovered” the old Greek proverb that democracies last until people realize they can vote money to themselves?

People who don’t vote undermine Democracy.

I disagree, why should I at best have to vote for the party that promises to interefere with/ban the least amount of things that I’m interested in? That implies to me that the system we have to supposedly represent us doesn’t work properly. I’m willing to compromise a few things for “the greater good” but I don’t really enjoy voting away my right to x,y and z because abstaining is bad mmkay.

I know the smug retort is “why don’t you stand for parliament and change the system then” but the realistic answer is that I don’t have rich parents, nor have generated sufficient personal wealth to stand on my, and I don’t think I’m a big enough cunt to be a professional politician.

[edit] I guess to put it more simply, the last time I voted (17 odd years ago) I realised I wasn’t voting for things I wanted, I was voting for the least number of things I disagreed with.

Just because you call yourself a democracy, doesn’t mean you are one. Technically you can call China a democracy. You have elected officials running things, right? It is even called The People’s Republic of China. How much more democractic can you get?

The only problem is, they must be from the communist party, and the electors are other communist party officals. A country’s claim vs its reality are not always the same thing.


Electing officials based on appearances vs ability damages a democracy.

A non-critical press who merely parrots what official’s say damages a democracy.

A system where only the very rich have much of a chance at higher political offices damages a democracy.

Non-Voters are just inert, and may be a symptom of an ailing democracy.

I bet if the united states had a negative vote, such that when casting it, all candidates would have a vote deducted, a lot more non-voters would vote. You would have to pair it with a law that would require someone to get a minimum percent of the votes cast and then if they didn’t, they would be disqualified from running in that election again.

Greedy voters undermining democracy is an idea as old as Plato. In fact, it is in Plato’s The Republic. After the beneficent dictators are overthrown by opinion groups that disagree with the rule of philosopher kings, the people will gradually undermine their own democracy by voting for the candidates who agree to give them the most out of the government coffers.

After that, a military regime takes power and becomes oppressive, being, what, after a couple of steps, overthrown by the next group of philosopher kings?

It’s an old idea and we can be protected against the desire to vote ourselves benefits and thusly into extinction through the political process. Voters are not a perfect method of selecting the best policies and policy makers, they are simply the best way.

Some other problems;

  1. The author seems to suppose that controlled economies cannot make incorrect decisions as to economic policy. I think you may notice that there are very few repressive regimes other than the Nazis who managed much long term success in recent history without the benefit of oil and American gunboat diplomacy. And the Nazis had a war machine to thank for their economic progress.

  2. The author seems to ignore the prospect that, just as social policy minded voters can vote in their own potential self interest, monied interests can do and advocate for the same. It is a two way street, this whore of Babylon, sometimes the you eat the regulatory bear, and sometimes the regulatory bear eats you.

  3. Freedom isn’t free, but it is a tremendously cost effective way to make people happy. It also allows for peaceful regime change due to an inability to deliver the desired results by the party in power. If people can vote, they do, if they cannot vote, there are costs associated with that and they are defined in terms of human casualties.

  4. Democracy guarantees that the state will exist as it should, for the benefit of the people. A fascist kleptocracy as advocated by the author defines individuals by their obligations to an entity that exists only on sheets of paper. This is wrong on a number of levels. Notably, one way in which this is the stupidest idea that I have ever heard is that it misses the entire point of capitalism. Capitalism gives the people what they want. You can’t know what they want if you don’t ask. The spirit of democratic freedom in the United States and abroad is so tightly bound to our entrepeneurial spirit that to slit the throat of one is to doom the other.

  5. Lastly, Democracy is an important method to curb over regulation. The people do pass stupid laws, yes, but those laws have to be justified and explained to skeptical voters in a society where suspicious pamphleteers lie in wait around every corner. Without this check, which I call the, “Butt Fucking Dumb Test,” we would have even more bad laws than we do now.

  6. If you want the best country, you need ideas to compete, just like if you want the best product at the best price, you need competition. Without competition in ideas or products, you have only bread lines.

If everyone who didn’t vote, or who voted for parties who were “least bad”, instead voted for the party they truly believe was best…

… then we’d have a totally different country.

I don’t think the Banana Republic oligarchs have historically CARED about the others. As long as there’s enough police/military to suppress revolts (usually Marxist-slant or the interesting leftist-Catholic priests) to preserve their priviliges they don’t mind. In much of the region, the same light-skinned dynasties ruled over Indian peasants who barely spoke Spanish.

There’s arguments the wealthy landlords have had little incentive to improve efficiency because they have all the wealth they want.

As for democracies and wealth, please be remembering Democratic India is 1/6th of the world’s population and quite poor.

Aha. I knew it.