Why Democracy Fails

Democracy has been touted as the gold standard of governmental systems. There is hardly a day when the media doesn’t cite an example of why one group or another needs democracy. Many states even fight to bring this system of government to other nations at the cost of many lives. Our education reinforces the idea that democracy is the highest ideal for many people. It has truly become a religion. The truth is that democracy is the antithesis of liberty, not the utopia that many would have us believe.

When discussing the non-aggression principle, we derived four implications that impact our relationship with the property of others. Of the four implications, two are violated by democracy. These two are:

You do not have a right to initiate force against the bodies or property of others regardless of the number of initiators.

You do not have a right to designate other persons to initiate force against the bodies or property of others on your behalf.

Let us return to the previous example of the marooned ship, which has left 1,000 people stranded on the island with Crusoe and Friday. Friday was intent on getting a hold of Crusoe’s stockpile of fish, but Crusoe was able to rightfully fend off the aggressors.

Let us now assume that Friday and several other castaways decide it is best for the survival of the group that a portion of Crusoe’s, or anyone else’s, stockpile should be shared. They decide to form a government where decisions are based on majority vote, that is 50+1 will decide what is best for all. Friday’s group is able to get 800 people to join this new democratic system. 

Friday’s group votes by majority, and passes a law that says 40% of all fish acquired must be shared with the entire group. Crusoe refuses to abide by these rules on the account that he did not agree to be part of the new government and he doesn’t want to give fish to others without fair trade or exchange. Friday says that since Crusoe is living on the new government’s territory, which is the island, he has no choice but to comply, or they will simply take his fish by force. 
Looking at such a scenario we can easily see that majority rule violates the rights of those that do not agree to such arrangements outside of contracts. Within a democratic system, the minority will always be a victim of the majority. This is true if the vote is eight to seven, or even eight million to seven million. The number of voters does not matter. 

Democracy is often conflated with liberty. The illusion is that democratic states are free states because the electoral system provides the citizen a means of safeguarding his rights by voting to expel a tyrannical elected official from office. There are many flaws to this argument. 

Fundamentally, the citizen requires the assistance of his fellow voters to secure his rights; his own efforts, by themselves, will not suffice.

Moreover, it is possible that one’s fellow voters can also be an enemy, rather than a friend, to one’s liberty. Consider that it was of little consolation to the ethnic and religious minorities in Germany that they were allowed to cast votes in the German federal election of March 1933, because the Nazi Party and its fellow coalition parties still won enough seats in the Reichstag to secure passage of the Enabling Act giving Adolf Hitler the power of a dictator. 

The concept of “consent of the governed” was destroyed by Murray Rothbard, who pointed out, 

Under this reasoning, any Jews murdered by the Nazi government were not murdered; instead, they must have ‘committed suicide,’ since they were the government (which was democratically chosen), and, therefore, anything the government did to them was voluntary on their part. 

The people may sometimes even vote against their own interests due to lack of understanding. Thomas Gordon argues that, “popularity is often but the price which the people pay to their chiefs, for deceiving and selling them.” He states,

Who was better beloved at Rome than Spurius Melius, while he was meditating the slavery of the Roman people? Who could ever boast such potent parties, such numerous followers, such high applause and regard, such trophies and statues, as Marius and Sulla, Pompey and Caesar, Augustus and Anthony could boast; while they were overturning the state, oppressing mankind, butchering one half of the world, and putting shackles upon the other? And, in fine, who was ever a greater impostor, and more admired prophet, than Mahomet was? 

All these men were enemies to liberty, truth, and peace; the plagues and scourges of the earth: But they deceived and destroyed their people with their own consent, and by the highest wickedness gained the highest popularity.

There are even more complications with democracy. The behavior of individuals as consumers and investors may be totally different than their behavior as voters, because the incentive structures are entirely different.  

In a free market, a consumer’s decision to purchase or not purchase a particular product at a particular price is subject to approval by the producer/seller, but does not require the permission of the majority of people or their representatives. 

The effects of that purchasing decision are likely to have a much greater impact on the consumer’s life than his decision to vote a particular way in an election.

In a market economy, both the producer and consumer can experiment with different products and determine through trial and error what the consumer likes best. Both the producer and consumer put their own money on the line in conducting such experiments, and those who do not wish to participate in the experiment are free to refrain from making any financial investment in it. Those naysayers have no power or need to veto the product, except by withholding their own money from it.

The insistence that all citizens in an area live under the jurisdiction of one democratic government produces conflict among its participants, who often are working at cross-purposes. They get into arguments as to what “services” (e.g. investigation of drug dealing or investigation of homicide) the government should provide and how much.

It is very different from consumers with different preferences peaceably going their separate ways, one to a McDonald’s and the other to a Burger King; or of producers cooperating within a company to make money, with those who disagree with company policy or management finding or creating another firm to work for or invest in.

A voter in a democracy who votes for a bad law or an incompetent leader has just as much voting power in the next election. The same is true for the voter who voted for better laws and relatively competent leaders. 

There is no mechanism to individually reward wise voters or punish foolish ones. The rewards and punishments are, in many cases, imposed on all those who are subject to the government’s jurisdiction. 

The voter who is in the minority can only exit the system by leaving the country, an option with potentially high switching costs. Despite having paid into the system, he cannot cash in his investment when he leaves, as the minority shareholder in a corporation can.

Rent seeking is also a problematic issue, due in large part to most democracies not enforcing a proportionate relationship between voting power and contributions to the system. The majority of voters can use their franchise to tax the relatively wealthy minority. 

This is in contrast to how most private corporations or organizations are set up. Those institutions allocate voting power and dividends in a way that is linked to how much the voter invested in the system. Bureaucrats are not only government employees, but voters who may seek to preserve their positions by re-electing incumbents, or raise taxes to support their own salaries.

Also, consider that elected officials have no incentive to provide the best services possible for the people at large. Most elected officials are only in office for short terms perhaps two to four years. 

In a sense, they are only renting their office. There is no incentive to leave office in a better place than when they entered it. As a result, elected officials seek to maximize the power of their office to their own benefit over those who elected them.

While competition in the marketplace improves the quality of services, competition within the state political system does the opposite. 

Improvements only seem to take places in the process of immoral actions: cheating, lying, manipulating, stealing and killing. As a result, those who are the best in these areas excel within such a political system. It does not rely on those who are naturally wise, wealthy, brave, or on any other productive achievements. Rather, in a democracy, everyone has the opportunity to pursue politics as a career. 

The pro-democracy mantra has been that “we need to just elect the right people.” This is the mantra of every election. However, very few have caught on that the “right people” will never be running for office. 

As a result, people continue to hope and dream for the perfect politician who is somehow more infallible than the rest of humanity. Yet, the electorate has failed to realize this paradox.

They understand that humanity is not composed of angels, but are under the delusion that politicians (who are also fallible people) are in some way better capable of running the lives of others. This is despite a general consensus that politicians are not trustworthy.  Frédéric Bastiat brilliantly explained,

If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?

At this point, the wisdom of the crowds is often invoked. That is to say, the collective opinion of a group of individuals is superior to that of a single person. When applied to democracy, nothing can be farther from the truth. 

The electorate has very little incentive to educate themselves on the issues, or improve their understanding of the implications of political policies. After all, there are no disincentives for making erroneous choices at the ballot box. Unlike a market, democracy does not provide a way of allocating scarce resources efficiently. It is merely done via a vote at the ballot box with no consequences. 

It must also be understood that democracy is a commons, and not a market. As with the tragedy of the commons, a problem occurs when individuals exploit a shared resource to the extent that demand overwhelms supply, and resources become unavailable to some or all. As H.L. Mencken exquisitely wrote, 

In other words, government is a broker in pillage, and every election is a sort of advance auction sale of stolen goods.

The electorate will vote on the allocation of these resources that best align with their own interests regardless of actual economic facts and implications to society. As a result of this, there is an opportunity for invested actors to “educate” the public at large in order to sway opinion. 

These are entities such as political parties, think tanks, special interest groups, corporations, etc. These groups have a large stake in the pie and will invest heavily in order to influence political outcomes in their favor.

Edward Bernays, the father of public relations, proclaimed,

The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society…We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized.

Bernays goes on to write about how voters are overwhelmed by the number of choices in a democracy, and that these manipulators are able to distil these choices down to a manageable number. While he suggests this is a positive for society, we can see how far removed the ideological assumption of “rule by the people” is from the actual practice of democracy. This lie is perpetuated with the conflation of democracy and liberty, and with the myth that “the people are the government.” 

Democracy is the antithesis of liberty. The foundation and cornerstone of liberty is private property and majority rule is thus logically incompatible with this. The management of the social apparatus of compulsion and coercion, via government, is brought to power by an election in which the majority vote attains dominance over the minority and can expropriate their property. In essence, 51% of the population can control the other 49%. Consider the U.S. Population of 322.7 million. That is to say 164.6 million can force the other 158.1 million to comply with their edicts. However, the picture is even glummer. 

The number of Americans eligible to vote is 218.9 million, but only 146.3 million are registered. In 2012, only 126.1 million people turned out to vote. This means that only 39% of the population voted. As a result, the beloved rallying cry of majority rule itself is a farce. 

Despite the equality and fairness messaging of democracy, nothing is more unfair than such a picture. True democracy is instead found in the marketplace, with voluntary actors free of the threat of government force. 

Let us now examine democratic rulers themselves. We have already seen the blurring distinction between rulers and the ruled. That is “we all rule ourselves” and “the people are the government.”  Democracy promises that all of us can become president, senator, mayor, etc. 

This is considered a “public service” and held in high esteem. These elected officials are given predetermined limits on their tenure in office. In the case of the U.S. President, this is four years but limited to two terms. Thus, a total of 8 years. 

In addition to these limited tenures, elected officials are also given the authority over public budgets to varying degrees. These budgets are expropriated from the public through various means such as taxation and inflation. Moreover, these budgets are arbitrarily determined since there is no price mechanism in place that would allow them to allocate resources where they are most needed. Such is the case for all monopolies. 

The combination of limited tenures and public budgets creates a unique situation for these officials. In short, they are temporary caretakers of a specific territory under their control, with none of their own private resources at stake. 

The temporary caretaker of a resource (public property), is concerned primarily about his current income and pays little or no attention to capital values. In contrast, the owner of a resource (private property) is concerned about the current income to be derived from the resource, and the capital value embodied in it as a reflection of expected future income. As such, a private property owner’s interests are long term, and the temporary caretaker’s interests are short term.

With this knowledge, elected officials have no incentive to do what is best for the people living within their specific communities. Rather they must maximize their utilization of the system to their own advantage as quickly and as frequently as possible before their time in office expires. 

Even worse, elected positions without term limits have been filled by career politicians who have gotten so good at gaming the system they spend their entire lives suckling from the teat of public funding. 

A common retort to these allegations against democracy is democratic peace theory. That is democracies don’t go to war with each other; therefore, the entire world must be made democratic. Ironically, it is the United States that is often the world’s model for peace. 

Yet, the role of the United States affairs has been quite the opposite with its doctrine of American exceptionalism and zealous warmongering. The excuse for perpetual war has been that many state actors are not democratic and resist democratic reform; therefore, war must be waged on those states in order to convert them to democracy and create lasting peace. 

Democratic peace theory draws broad conclusions from a short period in modern history with very few cases before the 20th century. In fact, the bulk of the evidence offered in favor of the theory is the observation that the countries of Western Europe have not gone to war against each other in the post–World War II era. 

Similarly, there are cases such as Japan and South Korea in Asia. While one is hard-pressed to find a counter example, there is a distinct thread that runs through all of these nations. That is, they have all become part of the U.S. empire. This is evidenced by the fact that there are U.S. troops stationed in nearly all of these countries. What we see is not that democracies don’t go to war with each other, but that a hegemonic power such as the United States does not let its various colonial outposts go to war with each other. 

During the hegemonic reign of the Soviet Union, none of its states went to war with each other either. Yet, there is no one claiming that communist dictatorships don’t go to war with each other, and thus communist dictatorships are the best option for peace. 

There are also a few interesting conflicts between democracies to consider. These include the Turkish invasion of Cyprus, the Yugoslav Wars, the war between Ecuador and Peru, the war between India and Pakistan, and the war between Israel and Lebanon. 

Democratic peace theory also assumes that democracy is the only solution to peace and that non-democratic entities are not peaceful. Yet, this does not account for nations that were not democratic, but also had peaceful and liberal policies. 

There were numerous pre-war monarchies that were definitely not dictatorships and had more peaceful policies than democracies of the time. Consider the Habsburg reign of Germany and Austria, or the multicultural Ottoman Empire. It is also worth noting that Lenin and Stalin were certainly more democratic than Czar Nicholas II, and Hitler was more democratic than Kaiser Wilhelm II or Kaiser Franz Joseph. 

It seems that democracies these days are in a state of perpetual war. After all, it is easy to create demons to fight when the public is spooked into giving up more of their freedoms and financial resources for security. For democracies, the endless supply of public funding lines the pockets of politicians and the military-industrial complex. With no incentive for peace, how can advocates for democracy claim we are better off in such a system? Rather than democratic peace theory, it should be called justified war theory. 

Finally, managing a many government system is difficult. Democracy is the worst tool for such a job since most voters lack the knowledge, expertise, or have done the research to make sound decisions. 

It would be akin to performing open heart surgery by voting. It would be a horrible idea to let voters decide how a doctor should proceed with the surgery. The patient will surely perish as a result. Similar consequences can be expected when attempting to manage a government system.

This essay is an excerpt from my book, Private Property, Law, and the State, which provides a concise and rigorous presentation of property rights theory and the roots of morality.