TGIF: Arms Sales and Democracy

The U.S. government's role as the world's premier arms donor and dealer is now under renewed scrutiny. I can't imagine why.

But seriously...

We may legitimately ask if this role fulfills democracy's promise of, in Lincoln's words, "government of the people, by the people, for the people." Or are we justified in concluding that with the government's arms distribution, democracy falls short of its promise even more so than it does in its other functions?

This is something Chris Coyne of George Mason University and its Mercatus Center F. A. Hayek program spends a lot of time studying. In this video and published work, Coyne closely examines the international arms trade, which the U.S. government dominates. Things look bad both for the arms trade and for democracy.

David Friedman, the author of The Machinery of Freedom, has pointed out that Winston Churchill's observation about democracy -- "the worst form of Government except for all those other forms" -- is not praise democracy but actually a put-down of government per se: if democracy is the best we can do, then we've got problems. 

The intrinsic flaws of democracy have been much discussed. (Here's an unappreciated example.) The problems start with the impotence of a single vote. If by your own actions you can't affect the outcome of an election, what incentive do you, a busy person, have to invest time, money, and effort to become an educated voter? In selecting a candidate you'll use criteria other than the kind you use when buying a car, a carp, or a carpet because in contrast to the marketplace, in politics your choice is not decisive.

Most people don't like to hear that their one vote does not count. They evade the simple probability. I would ask the skeptic this: if it were legal to buy another person's vote, how much would you pay? 

Related to the problem of the impotent vote is the problem of costs and benefits. When you pick out a car, carp, or a carpet, you know you will pay the price and get (virtually all of) the benefit. So you choose accordingly. Contrast that with politics, where any one voter will pay only a tiny fraction of the full social cost and get only a tiny fraction of the total benefit, say, from a tax cut. Incentives matter. In politics, spill-over effects abound, and no one, unlike in the market, has a profit incentive to "internalize the externalities." Political operatives actually benefit from that problem because they can exploit it to justify wielding more power. That's a perverse incentive.

Democracy's other flaws relate to the politicians' and bureaucrats' limited knowledge and limited ability to create social order and to their desire to advance their own careers. These are the well-documented Austrian and Public Choice critiques of government. Some political operatives may be sincere, but if so, they are sincerely deluded in thinking their method -- coercion -- works for the rest of us.

Finally, we have the problems of asymmetrical information and lack of accountability. Voters will always be ignorant about much of the bureaucracy's operations and full consequences. Closely monitoring the state is impossible. Moreover, should voters learn about the harm the government does, the costs of really changing things are likely to be prohibitive. Forget about suing the state. All of this adds up to virtually zero accountability.

Coyne builds on this critique by taking a concept -- "noxious market" -- that is used against the free market and applying it to government arms sales. "Noxious market" is a term a philosopher coined to condemn certain alleged morally offensive private exchanges. The markets for kidneys, drugs, sexual services, and other things are said to involve sellers or buyers who are so vulnerable and ignorant that the government ought to step in to protect them and society at large.

Coyne thinks entrepreneurship can provide remedies in the private market, but then asks a good question in the interview: "What happens if we extend the logic of noxious markets to the government realm?"

So one area where we focus our research is on the international arms trade. Our conclusion is that it is a highly noxious market. It takes advantage of the vulnerable [such as the powerless taxpayers]. There are massive asymmetries [of knowledge], both domestically and internationally. And there's reason to believe it leads to really significant harms for societies where the arms go, but also the broader world as well.

In other words, he says, if the objection to noxious markets is "weak agency" in some of the participants, there is no realm in which agency is weaker than in government arms dealing and foreign policy in general. In that realm, the ruled populations on all sides can hardly know what is going really on, and catastrophic unintended consequences usually result. Where do those arms end up and who are they used against?

Government of the people, by the people, and for the people is a chimera. The only alternative is a framework based on individual rights, including property and contractual rights.