TGIF: Socialism with a Fig Leaf

What work does democratic perform in the phrase democratic socialism? It's a fig leaf intended to conceal what would presumably be repugnant to most people: the coercive regimentation inherent in socialism, whether international (Marxist) or national (fascist).

Socialism has a nasty record dating back to 1917, so socialists have felt compelled to clean up its image. Democracy is supposed to do the cleaning up. But does it? Could it?

Before we get to that, we should remind ourselves that no single conception of socialism exists. In one version, socialism denotes central economic planning, the top-down command economy. However, other socialists envision a collection of operations governed locally and democratically by workers, perhaps with input from other so-called stakeholders. That used to be called syndicalism.

These visions do not blend readily. If each firm, factory, and farm is run by its workers, who have seized it from the creator/owner, whence the central plan?

In the market, individual productive entities do not exist in a vacuum. They buy and sell along a vertical structure of production ranging from extraction to retail. For example, a steel processor buys iron ore from a mining company and sells its products to manufacturers of producer and consumer goods. Global supply chains are so complex that no one could grasp the whole. Conditions and prices often change, requiring flexibility, foresight, intuition, improvisation—in a word, entrepreneurship. And don't get me started on transportation. Raw materials and semifinished products must move expeditiously from one place to another, often over long distances, in bad weather as well as good. Business is the original worldwide web. (See Leonard E. Read's "I, Pencil.")

Thus, coordination is indispensable if billions of people with diverse needs and tastes are to have access to the most goods at the lowest possible expenditure. The more that scarce resources are economized, the more stuff we can have. How can the coordination of diverse plans be achieved? Ludwig von Mises and F. A. Hayek, along with other sound economists, long ago demonstrated that what permits coordination is the market—that is, the price system and its institutional requirements. Prices are constantly updated guides to producer and consumer action, carrying critical, dispersed, and often unarticulated information about supply and demand. Prices are not magic. They require 1) private property in the factors of production and consumer goods, 2) markets, in which unencumbered trade of private property can take place, and 3) money, a medium of exchange, the less subject to political manipulation the better. Without these things, economic calculation, coordination (mostly with strangers), and general prosperity cannot take place.

That's how it works in a market economy, even a government-hampered one such as ours. How could this seeming miracle be accomplished under socialism, which is hostile to the market and its requirements?

A central planning board, nominally acting on behalf of society, would presumably have the power to issue orders to its personnel; everyone would be a state employee. Well, it could try, but the results would be a disaster, as history shows, because of the aforementioned coordination and knowledge problem (and incentive problem) long documented by economists and economic historians. Getting to vote for the members of the planning board, which wouldn't last long even if it began that way, could not save the system.

What about an "economy" of autonomous democratic plants, offices, and farms? We can imagine an answer. First, at the lowest level, the workers (and perhaps other stakeholders) would vote not only for their managers, but also for representatives to a council of firms at the next level up. In turn, the members of that council would vote for delegates to an ever-higher council, and so on until the pinnacle is reached, where a comprehensive plan would be promulgated and then imposed.

How could it work otherwise? If it sounds rigidly hierarchical, that's because it is. But things could hardly be expected to go smoothly. Where does the information that market prices convey come from under socialism? Moreover, even if everyone in society wants some kind of central plan, the odds of everyone wanting the same plan are precisely zero. And if everything is to be decided by majority rule—we're talking about democracy, right?—there will be no avoiding election campaigns for people and plans, campaign promises, and dubious efforts to convince voters to a point of view. In other words, there will be no escaping "the manufacture of consent," the essence of the democratic procedure, which self-styled dissidents condemn today. Ironic.

Such an arrangement has no prospect of creating or sustaining a modern industrial economy that could properly cater to billions of people worldwide.

That's the economics of the matter. The descriptor democratic before socialism, remember, is to give state regimentation a smiling face. Being able to vote within a socialist system is supposed to make all the difference. But having a mere one vote—when (at best) your whole life is to be subordinated to majority rule—is nothing compared to the sovereignty one has in the unhampered competitive market, or even in today's sea of government intervention. Mayor-elect Zohran Mamdani's signature theme of dignity through pervasive democracy is exposed as so much snake oil.

The idea that the key to dignity and liberty is voting on everything was stripped of its romance by the 19th-century Swiss/French classical liberal Benjamin Constant (1767-1830) in his must-read essay, "The Liberty of Ancients Compared with that of Moderns (1819)." His title is self-explanatory. Here's how Constant described the modern notion of liberty:

For each [person] it is the right to be subjected only to the laws, and to be neither arrested, detained, put to death or maltreated in any way by the arbitrary will of one or more individuals. It is the right of everyone to express their opinion, choose a profession and practice it, to dispose of property, and even to abuse it; to come and go without permission, and without having to account for their motives or undertakings. It is everyone’s right to associate with other individuals, either to discuss their interests, or to profess the religion which they and their associates prefer, or even simply to occupy their days or hours in a way which is most compatible with their inclinations or whims. Finally it is everyone’s right to exercise some influence on the administration of the government, either by electing all or particular officials, or through representations, petitions, demands to which the authorities are more or less compelled to pay heed.

Yes, Constant included democratic participation in his description. But note that he put it last. The rights that he lists first, if respected, would limit what the voting public, acting as the state, could do to the individual. (Keeping the system limited is the problem that has proved insurmountable. That's why the state must go.) Democratic socialism could not be expected to observe limits. How could it? It's touted as rational social engineering.

What about the ancient idea of liberty?

[It] consisted in exercising collectively, but directly, several parts of the complete sovereignty; in deliberating, in the public square, over war and peace; in forming alliances with foreign governments; in voting laws, in pronouncing judgments; in examining the accounts, the acts, the stewardship of the magistrates; in calling them to appear in front of the assembled people, in accusing, condemning or absolving them.

Constant emphasized the narrowness of the ancients’ notion of liberty: “[T]hey admitted as compatible with this collective freedom the complete subjection of the individual to the authority of the community.... All private actions were submitted to a severe surveillance. No importance was given to individual independence, neither in relation to opinions, nor to labor, nor, above all, to religion.” (Emphasis added.)

Isn't having one vote real power? Constant said no. "Lost in the multitude, the individual can almost never perceive the influence he exercises," he wrote. Can you think of one election whose outcome would have changed had you done something different on election day?

We can see that Zohran Mamdani and his fellow democratic socialists, like the conservative populists, reject liberal modernity and the individual freedom it delivered. They may style themselves "postmodernists," but in fact they are reactionaries.

(For a full discussion of democratic socialism, see Stephen Hicks's Open College podcast, episode 36, "Democratic Socialism for Beginners.")

TGIF: The Absurdity of Democracy

If the continuing incompetence of Congress over passing a budget and reopening the U.S. government doesn't show the absurdity of unlimited representative republicanism, what could do so? Whether or not to extend COVID-era special subsidies for medical insurance appears to be the main issue, but other issues are undoubtedly involved. If it isn't one thing, it's another. That's politics.

The problem is that the government has its hands in everything. That means a constituency exists for each thing the government does. If you want to upset and mobilize a group of people, call for an end to some privilege or restriction, which must come at the expense of the freedom and wealth of everyone but the favored beneficiaries. That's how "democratic" government works, after all. This sets off a mad quest for favor, which some contenders will be more capable of securing than others. Don't fall for the canard that the bureaucrats and politicians rationally produce useful things. If something looks, quacks, and waddles like a canard, you can be sure it's a canard. "Who rules" is a secondary question. The first should be: what are the rules?

Rejecting democracy—representative republicanism, more precisely—does not entail accepting authoritarianism in any form. Quite the contrary. It entails full acceptance of the protection of individual liberty and property rights—the rights to life, liberty, and the pursuit of happiness, as Thomas Jefferson, inspired by John Locke, put it in the Declaration of Independence. If we cannot have market-ordered, individualist, anarchism, then at least let's keep the government strictly limited to barring physical force. If it ventures beyond that boundary, it sets off a civil war over the people's private wealth and liberty. If you seek the consequences, look around. They are blindingly evident.

As Adam Smith wrote in The Wealth of Nations:

All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society. According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions.

But isn't pervasive government necessary to engineer a decent society? No, it is not. Thomas Paine, no anarchist he, understood this. As he wrote in The Rights of Man:

Great part of that order which reigns among mankind is not the effect of government. It has its origin in the principles of society and the natural constitution of man. It existed prior to government, and would exist if the formality of government was abolished. The mutual dependence and reciprocal interest which man has upon man, and all the parts of civilised community upon each other, create that great chain of connection which holds it together.

 

 

The Welfare-State Paradox

"Whether ... a system of social security is a good or a bad policy is essentially a political problem. One may try to justify it by declaring that the wage earners lack the insight and the moral strength to provide spontaneously for their own future. But then it is not easy to silence the voices of those who ask whether it is not paradoxical to entrust the nation’s welfare to the decisions of voters whom the law itself considers incapable of managing their own affairs; whether it is not absurd to make those people supreme in the conduct of government who are manifestly in need of a guardian to prevent them from spending their own income foolishly. Is it reasonable to assign to wards the right to elect their guardians? It is no accident that Germany, the country that inaugurated the social security system, was the cradle of both varieties of modern disparagement of democracy, the Marxian as well as the non-Marxian."

—Ludwig von Mises, Human Action

TGIF: The Russians Are Coming? The Russians Are Coming?

Civilization, in fact, grows more and more maudlin and hysterical; especially under democracy it tends to degenerate into a mere combat of crazes; the whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.

―H. L. Mencken, In Defense of Women

It is in Mencken's spirit that I would size up this announcement from the U.S. Justice Department, titled "Justice Department Disrupts Covert Russian Government-Sponsored Foreign Malign Influence Operation Targeting Audiences in the United States and Elsewhere":

The Justice Department today announced the ongoing seizure of 32 internet domains used in Russian government-directed foreign malign influence campaigns colloquially referred to as “Doppelganger,” in violation of U.S. money laundering and criminal trademark laws. As alleged in an unsealed affidavit, ... Russian companies..., operating under the direction and control of the Russian Presidential Administration, ... used these domains, among others, to covertly spread Russian government propaganda with the aim of reducing international support for Ukraine, bolstering pro-Russian policies and interests, and influencing voters in U.S. and foreign elections, including the U.S. 2024 Presidential Election.

The release quoted FBI Director Christopher Wray: “Companies operating at the direction of the Russian government created websites to trick Americans into unwittingly consuming Russian propaganda. By seizing these websites, the FBI is making clear to the world what they are, Russian attempts to interfere in our elections and influence our society."

So once again a foreign power—usually Russia—is allegedly trying to manipulate the American people with disinformation as a presidential election is coming on. How dare the Russians do this? Political manipulation is allowed only to certain anointed Americans. It's a position of privilege. So the government will protect us from "consuming" Russian propaganda without knowing it. We're too stupid to check claims out for ourselves when they sound fishy—even when they come from so-called legitimate" sources. (Point of information: are Russians incapable of saying anything accurate worth hearing? Just asking.)

Before we get all primed for nuclear war, let's take a deep breath. Maybe it would help to picture a scene that may or may not have occurred in the Kremlin.

Picture President Vladimir Putin (not a guy I'd ever hang with) summoning a top aide to his office. "Sergei, I have a great idea," he might say this trusted aid. "Here's $10 million. I want you to launder it, then have some American-looking company pass the money to big-time American internet influencers. But make sure the money goes to people who are already saying what we want them to say. No sense wasting it on people who don't like us. Pay these friendly guys to post propaganda favorable videos."

Putin might have gone on: "What we want to do is capitalize—pardon expression, comrade—on the American sport of arguing about politics and culture. Muhahahahahaha! Yes, I know, America is severely divided over more issues than I can name. But it's not divided nearly enough for our purposes! We can do better, da? This will help us in many ways, primarily by disillusioning Americans about Ukraine. That would be good, nyet?"

After hearing Putin, Sergei might have laughed under his breath and agreed to oversee the project. Why might he have laughed? Because he might have been thinking, "Do we need to pay even a ruble on polarizing America? What a waste of money! America is doing just fine polarizing itself. They don't need our help. And $10 million? Is he kidding? That's a drop in the bucket compared to what Americans spend bitterly promoting their views on public issues. Is this the Putin who's cracked up to be so foxy? Sheesh! Maybe I should be president."

According to the government's indictment:

Many of the videos published by U.S. Company-I contain commentary on events and issues in the United States, such as immigration, inflation, and other topics related to domestic and foreign policy While the views expressed in the videos are not uniform, the subject matter and content of the videos are often consistent with the Government of Russia's interest in amplifying U.S. domestic divisions in order to weaken U.S. opposition to core Government of Russia interests, such as its ongoing war in Ukraine. [Emphasis added.]

Immigration, inflation, and other topics related to domestic and foreign policy? Are we to believe that Russian officials think they need to amplify divisions in America? How much more amplified can they get? And what about the Justice Department's acknowledgment that "the views expressed in the videos are not uniform"? What are we being asked to get upset about?

J. D. Tuccille writing at Reason points out:

Translated Russian documents [provided by the Justice Department] outlining a "guerilla media campaign in the United States" caution their intended audience that "in the United States there are no pro-Russian and/or pro-Putin mainstream politicians or sufficiently large numbers of influencers and voters. There is no point of justifying Russia and no one to justify it to." [Emphasis added—SR] The campaign was meant to exploit "the high level of polarization of American society" by paying commentators to say things they were already saying.

It's not clear they got a lot of mileage from that program.

That's an understatement, I'd say. But Putin's objective (if he was behind this) might simply have been to upset American officials and the public. Here's a suggestion: let's not get upset. Read the rest of Tuccille's article for more particulars about the effectiveness of meddling and about the U.S. government's own sorry decades-long record of manipulating other countries' political systems. Then remember the advice about stones and glass houses.

"So, take reports of Russian interference in American elections with a grain of salt," Tuccille advises, "knowing that Putin is paying Americans to say what they already believe, and the U.S. does the same in other countries. Importantly, none of that interference prevents you from making your own decisions."

I have plenty of criticism of democracy, as readers know, but I wonder: is America so fragile? Or is this one of Mencken's hobgoblins? If so, who benefits?

TGIF: Democracy as Religion

During a conversation with someone who loves representative democracy but hates America's current political situation, I pointed out a problem with his view. The current situation, I said, is a product of representative democracy. So you can't have the system without the lamented consequences.

Why is that? People like free benefits for themselves and society, and politicians prosper by promising and delivering apparently free benefits to enough voters. Individuals and interest groups see the government as a bazaar open for business 24/7.

The problem, of course, is that there are no free benefits. The government, which does not produce anything, can't give away anything it hasn't first taken from someone else. The system's inherent perverse incentives deliver big spending, high taxes, and growing budget deficits (when raising taxes is unfeasible) financed through massive borrowing. This process eventually leads to central-bank monetary inflation, rising prices, and shrinking purchasing power. The transfer of purchasing power from regular people to politicians is a form of taxation.

I proposed to my interlocutor that a better way to go would be to move the government's few legitimate functions to the free, competitive market, which aligns incentives more consistently with individual rights and general prosperity. The government's illegitimate functions should be abolished.

He mocked my position by holding his hand in the praying position and looking toward heaven as he said, "If only we all believe." I responded that it's no article of faith that freedom and free markets—classical liberalism—have eradicated most extreme poverty and created unmatched living standards worldwide. You can easily look up the graphs that show this astounding progress. The still-lagging areas lack freedom.

For roughly 200,000 years human beings lived short lives with virtually no material progress. Then a few hundred years ago things changed dramatically thanks to liberalism, the Enlightenment, and the Industrial Revolution. That was no coincidence, and understanding what economic historian Deirdre McCloskey calls the "Great Enrichment" requires no faith.

I could have said much more to my interlocutor, and I'll say it here.

First, classical liberalism, or what we moderns call libertarianism, is not mainly about believing; it's about respecting each individual's person, property, and liberty, and particularly about the government's respecting those things. It's also about understanding that freedom leads to social cooperation (the division of labor and trade), peace, and prosperity. Economic theory and history show it.

Second, it's democracy, not freedom, that requires faith in the absence of evidence. It's a religion that holds that If we believe hard enough, tens of millions of us going to the temple polls to vote will make the right decisions. No one explains why it should work out that way. And it doesn't. It's a faith in magic, and magic is not real.

There is a glitch in the democratic religion: most voters are ignorant. Poll after poll shows that most people know little about the government and the economic process, which the government regulates. They are not only ignorant of basic economic theory, which the evaluation of candidates requires; they are also ignorant of basic indisputable political facts, such as who their so-called representatives are, how they vote, which party controls the Senate and House, and how much the government spends and borrows. How can they vote wisely? (For more on voter ignorance, check out the many YouTube appearances of George Mason Law Professor Ilya Somin and his book Democracy and Political Ignorance: Why Smaller Government Is Smarter, 2d ed.)

People shouldn't be faulted for not knowing these things because they have an incentive not to spend time and money learning; their time and money could be better spent. Better spent than on becoming an educated voter? Yes. How so? Because anything else they did would have a better chance of making a difference.

Am I saying that voting does not make a difference? Yes. In almost any election, one vote contributes nothing to the outcome. Ilya Somin says that one vote for president, on average across the states, has one chance in 60 million of determining the outcome. The chance is larger in House, Senate, and other races but not enough to make make a difference. People vote for many reasons, but one reason not to vote is a determination to decide the result. Voters understand this. With no incentive to learn what's important, they vote for what makes them feel good and against what makes them feel bad. The result is the mess we're in today.

The political realm differs from the voluntary sector because politics separates choice from costs and benefits. In the voluntary sector, when you choose a dozen eggs, you get a dozen eggs: you pay the price, and you enjoy the benefits. Not so in politics. Choosing Candidate A  doesn't mean you get Candidate A; that depends on a lot of other people. And even if Candidate A wins, you will reap only a minuscule fraction of the benefits (if there are any) and pay only a minuscule fraction of the costs. The bulk of the costs and benefits will fall on everyone else. Under those circumstances, most voters will pay no price for voting according to their biases, so that's what they will do.

What hope is there if ignorant people choose the country's rulers? The informed among us might stop having rulers, but they won't let us opt out. Somin calls for shrinking and decentralizing power. Good idea. But how?

 

TGIF: The Populist Trap

If you care about individual freedom and general prosperity, you'll want to avoid all shades of populism like the plague. It is economic illiteracy proudly proclaimed and writ large. As an alternative to libertarianism, it is bad in its own right—freedom is not on its agenda—but it is bad also because it is wedded to nationalism. That is, it treats the nation-state—not individuals and their projects—as the fundamental unit. It's ours against theirs. Disregard the hosannas to persons, families, and local communities. It's the nation that matters. 

Don't believe me? Then why do populists always want to interfere with people's right to trade as they wish regardless of borders? Never mind that protectionism holds the seeds of economic and military conflict and that unmanaged global trade is global cooperation.

I'm tempted to say that basically, the populist believes that scarcity is a capitalist plot. (There's some unwitting vulgar Marxism in that.) Populism presents itself as the politics of grievance: "working people" are fed up with an elite conspiracy of elected officials, bureaucrats, and "corporate" cronies who enrich themselves at the expense of ordinary people.

Bailouts and subsidies give the grievance some credence, but it's exaggerated. The unnamed culprit is market dynamism—or freedom. Entrepreneurship, innovation, and consumer sovereignty bring change in the demand for goods, which understandably makes people nervous. The bias favors the status quo. Blacksmiths and assembly-line workers are no longer wanted.

Anyway, since coercive government power is the only way to grab privileges at other people's expense, power itself should be—but never is—the villain. Greedy "Big Business" is the target. No distinction is made between bigness achieved through successful service to consumers and bigness achieved through anticompetitive government interference with market relations.

What is the populists' alternative? They say they want a government that serves working people. Never mind that people produce to consume, not vice versa. How do they intend to get the government and economy they want? Through democracy, though they ignore the elitism inherent in any political system. Politicians in a democratic republic need to cobble together majorities to get elected and reelected, but when in office they have elbow room to set the agenda for the one-size-fits-all program that they decide best serves the people's needs. Since people don't understand economics and are biased against markets and foreigners, the program brings tariffs (which hurt American consumers and workers by raising prices and provoking retaliation), bailouts, and deficit spending financed through the hidden inflation tax. Fiscal restraint is not a priority. Every penny of the budget has a constituency behind it.

We find populist agitation within what is misleadingly called the "right-wing" and "left-wing." On the left, the populists try to counterbalance inane identity politics, which in their view has pushed class politics off the agenda. They seem not to realize that class politics is an earlier form of identity politics; it holds, wrongly, that an inherent and irreconcilable conflict exists between haves and have-nots, between employers and employees, that can only be rectified by making the state more powerful than it is today. Never mind that mass production must come before mass consumption, and markets have wiped out much poverty worldwide. The headline-rich "inequality" red herring will keep everyone distracted.

When a Republican populist (say, J. D. Vance) hears the term economic freedom, he is likely to envision unilateral scope for the sovereign state: specifically, a strong leader who wields tariffs, trade quotas, sanctions, antitrust prosecution (which protects inferior competitors, not consumers), and more in his crusade to strengthen the "U.S. economy" by increasing exports (by muscle if necessary), blocking imports, saving or restoring "American jobs," and punishing businesses that provide superior consumer service. What he doesn't envision is free individuals trading goods, services, and labor with whomever they want, including new immigrants who seek a better life without government permission.

The populist can't tolerate individual freedom because, in his view, that would be chaos. He rejects consumer sovereignty, so he goes with the only thing left: the state. He has yet to learn what has been known at least since the Scottish Enlightenment of the late 1700s: that the best kind of social order is spontaneous order, the order that results from free, cooperative, commercial human interaction, not central planning or industrial policy.

The populists, "left" and "right" point to people's economic hardship, but it never occurs to them that government intervention, of which there is no shortage, could be at fault. Are housing prices too high? They blame immigrants (who improve our lives along with their own), not the myriad government building restrictions. Are supermarket prices rising? Blame corporate greed and ignore the money-creating Federal Reserve. This blindness to government intervention is on display with every issue. The populists never see the straitjacketed markets, only too little democracy. But democracy can't get us out of the mess it's got us into. Virtually everything the government does affects market relations. Yet voters know nothing about economics. They don't even know that prices fall when supply rises.

The populists find industrial policy more to their liking than freedom. That's central planning—economic and social engineering, "picking winners"—without nationalization. It's subtle socialism, and it has the same flaws. No one can know enough to plan the economic interactions of billions of people. Anyone delusional enough to think he and some "experts" could manage that task should be laughed off the stage. Aside from the knowledge problem, the incentive problem will always plague us. We know what Lord Acton said about how power corrupts. But power also attracts the already corrupted.

But aren't the populists at least antiwar? Sometimes. They tend to oppose U.S. participation in the Ukraine-Russia war—now. But they can't be relied on. They tend to favor arming Israel in its Gaza onslaught. As nationalists, they always present a potential for conflict, these days with China and Iran. We saw that in Trump's term as president. He cannot be counted on to dismantle the trip-wire alliance system, and he's enthusiastic about the de facto alliances with Israel and Saudi Arabia. Think of the arms sales! That's good for American workers, right?

Let's not forget the link between border security, which populists demand, and the drug war, which they also love. That link offers populist leaders many opportunities for bloody intervention south of the border. One more thing we can be sure of: the populists do not see global trade as a peace-maker, or trade restrictions as a source of conflict. Globalization, even without a government role, is a dirty word. I see no reason for comfort here.

Even when the populists oppose wars (did Trump oppose any?), it is not so that the taxpayers can keep their money and spend it as they like. No, the populists stand with progressives: they want to transfer the money from the Pentagon and CIA to domestic departments. Details may differ, but that's all.

The best reason to oppose war and the preparation for it, aside from the obvious one, is that they require a bloated, intrusive government, battalions of bumbling bureaucrats, and the diversion of scarce resources from consumers to military contractors. Populists just want to redistribute the bloat.

It may be that the "right-wing" populist leaders are phonies and don't mean what they say. Some in the "left-wing" tribe say that about Trump and his running mate, Vance. Maybe that's true. But if they are liars who stand for something else, we can be certain they don't stand for shrinking the state and expanding individual liberty. That's not on the menu these days.

TGIF: "We Have Met the Enemy and He Is Us"

The famous line "We have met the enemy and he is us" is from Walt Kelly's comic strip, Pogo. Kelly adapted the line from a U.S. naval commandant who, during the War of 1812 against Great Britain, reported to his superior, “We have met the enemy and they are ours.” Kelly did the parody for the first Earth Day in 1970, a pro-state, antimarket, antihuman occasion.

More constructively, we can apply Kelly's slogan to a bigger matter, namely, who's to blame for the bad policies that representative democracy turns out? Is the culprit an elite group of politicians, bureaucrats, and Big Business/Big Labor cronies, that is, a ruling class that conspires against the public interest? Or is the culprit " us," or, more precisely, the voters?

Most libertarians, like most progressives, would reply "ruling class," although David D. Friedman, a leading libertarian free-market anarchist, has been a major exception. (See The Machinery of Freedom: Guide to Radical Capitalism, 3rd ed., ch. 38, free online.) So too is economist and anarcho-capitalist Bryan Caplan.

Two important libertarian thinkers, Frédéric Bastiat (1801-1850) and Ludwig von Mises (1881-1973), also dissented from the common view that democracy is routinely hijacked. "One striking feature of the Bastiat-Mises view," Caplan writes, "is that politicians are actually tightly constrained by public opinion. On their account, democratic competition keeps elected officials in line; if they deviate from majority preferences, they lose elections and their jobs."

In his classic work The Law, Bastiat, the fantastic French classical-liberal political-economic essayist, pointed out that in a democracy with universal suffrage, the main potential threat to liberty and property would come not from a ruling elite but from the voters, who previously had no voice in the government. If voters know nothing about economics and are antimarket to boot, watch out! They will want the politicians to interfere with market relations, not realizing that intervention is harmful because it has significant opportunity costs: all the good things that would have been produced had the government not engaged in "legal plunder." The benefits of free markets are counterintuitive, and understanding requires knowledge, which the voters lack. So they favor import restrictions, business and farm subsidies, regulations, heavy spending, and other apparently free benefits.

Since the politicians want to be elected and reelected, they will cater to the voters' preferences, even if the politicians know that those preferences are harmful. Democracy supplies poison because voters demand poison. The voters' will is not substantially throttled by special interests.

Bastiat wrote:

Up to now, legal plunder has been exercised by the minority over the majority as can be seen in those nations in which the right to pass laws is concentrated in just a few hands. However, it has now become universal and equilibrium is being sought in universal plunder. Instead of the injustice existing in society being rooted out, it has become generalized.

In another place (Selected Essays on Political Economy, chap. 9), he wrote that "public opinion, whether enlightened or misguided, is nonetheless mistress of the world."

And again (Economic Harmonies, chap. 4): “Political power, the law-making ability, the enforcement of the law, have all passed, virtually, if not yet completely in fact, into the hands of the people, along with universal suffrage.”

H. L. Mencken, that keen observer of America in the first half of the 20th century, might have read Bastiat: "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

Caplan confirms Bastiat's view. In various writings he explains that while most social scientists, including public-choice economists, believe that special interests do thwart the voters, it is untrue. 

The "point is not that no unpopular policies exist," Caplan and Edward Stringham write after scouring the data (citation below). "But bona fide examples are hard to come by, and quantitatively significant ones are scarcer still." Time delays and "frictions" may put the politicians and voters out of sync—but only temporarily.

Voters can afford to be, in Caplan's words, "rationally irrational." In any election, each person can costlessly vote according to his antimarket biases since no single vote is decisive and the total cost of a candidate's bad policies will be shared by all.  (See The Myth of the Rational Voter: Why Democracies Choose Bad Policies and the articles linked below.)

Caplan points out that Ludwig von Mises took a position similar to Bastiat's. In Theory and History, Mises wrote:

A statesman can succeed only insofar as his plans are adjusted to the climate of opinion of his time, that is to the ideas that have got hold of his fellows’ minds. He can become a leader only if he is prepared to guide people along the paths they want to walk and toward the goal they want to attain. A statesman who antagonizes public opinion is doomed to failure… [T]he politician must give the people what they wish to get, very much as a businessman must supply the customers with the things they wish to acquire.

I found that quote, like the Bastiat quotes above, in the first of two Caplan blog posts: Mises and Bastiat on How Democracy Goes Wrong, Part I, and Part II. (For more, see Caplan and Edward Stringham's "Mises, Bastiat, Public Opinion, and Public Choice.")

We might resist the claim that the people, not a ruling class, are to blame. But if we have a ruling class, it must be damned incompetent. The United States has the most progressive income tax in the West. The bottom half of income taxpayers pays only a tiny fraction (2.3 percent) of the national government's revenue from the tax. The top 1 percent pays over 45 percent. Big businesses face myriad regulations, often with exemptions for small firms. New restrictions are proposed almost every day. Antitrust prosecution always looms for the successful. Businesses and farmers get subsidies and other favors, but most people support them as socially beneficial.

Moreover, privileges granted to one industry impose higher costs on others. Tariffs for U.S. steelmakers burden steel-using companies, making them less competitive in the global market. If this ruling class is so fragmented and ineffective, maybe the concept is so imprecise that it is misleading.

When well-connected interests (who include not only business people) influence policy, Caplan writes, it's at the margin and, if anything, waters down what the majority wants. Caplans notes that more-educated people tend to understand economics better than less-educated people. Without "elite" influence, tariffs and minimum wages might be more destructive than they are.

Well, if the state is not "the executive committee of the ruling class," as Marx claimed, what is it? It's a bazaar where candidates offer goodies to blocs of economically illiterate citizens. The currency is the vote. To gain power, politicians need to win a majority—repeatedly. Yes, the people are propagandized, but just as businesses fail when enough consumers exercise skepticism about a product, regardless of advertising, so voters can exercise skepticism about the politicians' claims. People are not robots, and they encounter competing sources of propaganda/information. The joint that connects official propaganda to popular opinion is, to say the least, loose. If people are gullible, who's to blame?

What's the bottom line? No one can triumph in a struggle without first identifying the adversary. If the adversary is a shady, manipulative, nearly omnipotent ruling class, that would require one strategy. But if the adversary is the public's economic illiteracy and, as Mises repeatedly put it, its failure to grasp its "rightly understood (i.e., long-run) interest" in the free market, that's another matter entirely. Since that is indeed the case, freedom advocates should act accordingly.

The battleground is human understanding and nothing else, not even institutions, Mises says. As he wrote in Human Action, using 1930s monetary policy as an example (emphasis added):

"Whatever the constitutional state of affairs may be, no government could embark upon 'raising the price of gold' if public opinion were opposed to such a manipulation. If, on the other hand, public opinion favors such a step, no legal technicalities could check it altogether or even delay it for a short time."

Democracy and Free Stuff

Democracy: the matching up of people who want free stuff with politicians who promise free stuff. Problem: free stuff as they all imagine it does not exist. 

However, it does exist in the market, as explained by Frédéric Bastiat in Economic Harmonies, chapter 8, "Private Property and Common Wealth." See my discussion of that chapter.

TGIF: What Should I Do on Election Day?

Democracy is the theory that the common people know what they want, and deserve to get it good and hard. --H. L. Mencken

This column was prompted by a conversation I had with a few neighbors, whom I do not know, over the Nextdoor.com platform. I thank them for being unwitting grist for my mill. Of course, the names are withheld to protect the innocent.

A woman was upset about something the state government had done. She took to social media to say that this shows that we all need to vote. Always up to a challenge, I decided to weigh in. I asked what good would her plea do considering that one vote almost never decides an election. The chance of any given voter making a difference is virtually nil. How many tied elections have you heard about? In my longish lifetime, no election would have turned out differently had I acted other than I did. Not one.

Did the Nextdoor.com participants not think about the arithmetic? Why agonize over the "choice" they will face on election day? Why lose a wink of sleep?

You might think that since the woman was addressing an audience larger than one, she might respond that this is about more than one vote. I don't think that works because her audience was too small to make a difference, even assuming everyone she reached votes the way she wants them to -- which is unlikely. 

That aside, you'd have thought I had insulted the participants' religion -- which in a way I did. Democracy is a religion.

My neighbors' responses were predictable. What if everyone felt the same way as you? they asked. One person said that if everyone agreed with me, "nothing would get done." I might have responded, "If I thought everyone was going to stay home, then I might vote if a worthy person were on the ballot. (Not likely.) My candidate would win 1-0. Whoopee! Or: considering what governments do to us, getting nothing done would be a feature, not a bug.

Instead, I asked them: why is voting the only matter about which you ask, "What if everyone thought that way?" The world would be in a sad state if everyone had done what any given person had done over the years. Does an aspiring doctor, lawyer, or plumber ask, "What if everyone chooses what I've chosen"? It's a paralyzing question.

How is the question even relevant? We're not doing philosophy here. It's a practical question. No matter what I do on election day, everyone else is going to do what he or she is going to do. They won't consult me. I guarantee it. So the outcome is going to be the same no matter what I do. In that case, why not do something that makes a difference, like play with the kids, have a conversation, read an article, watch a movie, donate blood, or make some money? In those cases, the means will almost certainly produce the end sought. That's not the case with voting.

Since my neighbors didn't want to face the math, I found little interest in the related point that they had no incentive to become truly informed voters. But this is like ignoring the 800-pound gorilla over there in the corner. One person thought it was enough to get the candidates' position papers and to look at Ballotpedia.com. I said that was hardly adequate. Everything that governments do affects the economy, which means us and our everyday lives. Wouldn't voters need to study economics before properly judging the candidates? I posed a thought experiment: candidate A favors the minimum wage. Candidate B opposes it. Other things equal, whom do you choose and why? No one answered. Someone said that's not what matters.

In fairness, I should concede that people have reasons to vote other than to influence the result. People vote because they see it as a sign of good citizenship, even if few people observe it. I suppose people vote simply to express support for a candidate or cause. It's like applauding at a major league baseball game. Your joining in (or not) doesn't make a difference. Related to this is the sense that voting is a sort of chipping in on behalf of someone you like. For these people, the point about not individually affecting the outcome won't apply. Voting makes them feel good.

I submit that all of this confirms what Bryan Caplan says about why democracies consistently choose socially destructive policies. It's not that special interests control the politicians, who then ignore the voters. That theory overlooks too much, as David Friedman shows in The Machinery of Freedom, chapter 38. (free PDF). He writes:

It seems more reasonable to suppose that there is no ruling class, that we are ruled, rather, by a myriad of quarreling gangs, constantly engaged in stealing from each other to the great impoverishment of their own members as well as the rest of us.

As Caplan argues, the public generally supports destructive policies that harm each member individually. Why? Caplan doesn't think the problem is rational ignorance that comes from the impotence of one vote. Rational ignorance ought to lead to pro-market choices about half the time and anti-market choices the other half. Instead we find systematically anti-market bias. Since you can't affect the election and acquiring information is expensive, you may as well vote according to your biases. It will feel good, and it's cheaper.

Caplan writes, "[C]ompetition impels politicians to heed what voters favor [protectionism, farm subsidies, etc.], not what is best for them." Remember, politicians want to be reelected or achieve a legacy.

I don't tell people what to do, so I don't tell them not to vote. I have no reason to think they'd listen to me anyway.

TGIF: Autocracy -- Boo! Democracy -- Hiss!

Here's why democracy is a dubious idea. Government decisions are high stakes. It decides matters of war and peace, prosperity and poverty, freedom or oppression. Yet we let incompetent people steer the ship of state. Most voters are ignorant and process what little information they have in biased and irrational ways. They fall prey to propaganda and demagogues. They are conformists and don't even try to vote their interests. Democracy is the political equivalent of drunk driving.

--Jason Brennan, Democracy: A Guided Tour

Well, we're into another out-of-control presidential election year. I'm sure everyone is thinking what I'm thinking: someone wake me when it's over.

This will not be my idea of fun. For good political news, we'll have to look to Javier Milei in Argentina (fingers crossed), assuming dethroned cronies and so-called labor leaders don't run him out of Buenos Aires on a rail.

Unless lightning strikes, the presidential race will be dominated by the execrable Biden and Trump -- and what could be more depressing than that? Thank goodness my one vote wouldn't count. Biden has been a blowhard weathervane since he was a whiz-kid senator. (In another life I was a newspaper reporter in Delaware.) Trump won't shut up until someone gives him a shot of sodium pentothal. Both are ethically challenged, and neither understands a whit about individual freedom.

Between the tribalism of party politics and the predictably woeful condition of monopoly governance, does anyone need any further demonstration that democracy stinks? What would it take? Why do people put up with it? I know why. Because they think the only alternative to democracy is autocracy. That's drummed into them in the government schools. Everyone learned that Churchill said democracy is the worst system -- except for the rest. But he rigged the competition. "The rest" did not include the only real alternative: the system of consent, cooperation, and contract. That's the free market, rooted in individual -- not collective or national -- self-ownership,  private property, free exchange, and free enterprise. There's the winner, Winnie.

Democracy is a scam perpetuated by rulers who want to deflect blame and anger by persuading the people that since they rule, they must be at fault for any shortcomings. It long ago morphed into a cult with articles of faith like "Every vote counts." It can't withstand scrutiny.

Most people wouldn't want to live in a pure direct democracy where they voted on all legislation. For one thing, they know the time demand would drive them crazy. But just as important, most of them know that they are not qualified. The government today has its tentacles in virtually every part of life. No one can be well-informed about, much less expert in, virtually everything. But that's what would be called for. Sure, people could consult experts. Um, which experts? (Other moral and epistemological objections, such as coercion and tacit knowledge, also apply.)

Representative democracy is supposed to address that problem, but it just kicks the can down the road. Instead of knowing everything about everything (or even a lot about a lot), the people only have to know which candidate fills the bill. That theory doesn't even look good on paper. 

To make things even more absurd, legislators theoretically represent large groups of people. Does that mean they should solicit their constituents' opinions? We've already seen that the constituents are unqualified. The alternative is for representatives to act on behalf of what they believe their diverse and largely ignorant constituents should want. No problem there, right? Wrong. 

Of course, while people speak solemnly about their responsibility as citizens, everyone knows his or her single vote won't make a difference in the election outcome. So where is the incentive to educate oneself in light of the huge costs if it is to be done correctly? People don't normally perform futile acts at great expense.

Think of the most serious-minded officeholder that you know of. Do you really believe that person is qualified to fulfill the de facto job description -- to, in Jason Bennan's words, "decide matters of war and peace, prosperity and poverty, freedom or oppression"? That's why most people vote for candidates who wear the same color cap and jersey as they do. How did they choose that color? In most cases, through a collection of social and economic biases.

I know: a constitution is supposed to protect basic rights from the legislature by placing them off limits. But how has that worked out since 1789?

As for the market alternative, what about negative spillovers from market transactions, like pollution? We must always ask: compared to what? Does democracy have no spillovers? Those who vote for the winning candidates are not the only ones who bear the burdens of their choices. Others do too. Many other people who didn't vote for the winners will pay higher taxes, suffer unemployment from the minimum wage, go without unaffordable homes in desirable places because of regulation, and die or see loved ones die in foreign wars. At least the market contains powerful profit incentives to "internalize the externalities." You cannot say that about the government. (I recommend once again David Friedman's essay "Do We Need Government?" Here's my take.)

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.

 

TGIF: Who Rules? That Is Not the Question

Today's two major contenders for political power seem to be elitists and populists. Funnily enough, both types are present in each of the big tribes known as progressive/liberal and conservatism, left and right, or Democratic and Republican. (Here's the lowdown on paleoconservative elitists.)

However, the elitist/populist framework should leave everyone dissatisfied. It omits too many details. Namely, it presents a contest apparently over who should rule: an anointed elite or "the people," which is not always well-defined. I put the term in quotes because the whole people cannot possibly rule.

The common framework ignores the far more fundamental question: which rules? In other words, what are the rulers, whoever they are, proposing to do? Exactly which orders are to be enacted as legislation and imposed by force? Are there to be limits on this rule? By what means? What happens if the limits are breached, as they have been constantly over the years?

That's what libertarians care about first: the rules. Who rules comes second. But everyone should care about this. Under certain rules, it wouldn't matter who was "in charge." Imagine a rule against anyone -- even "rulers" --  initiating force in any way against anyone else.

The problem is that the rules typically administered by the state, including representative democracies, shouldn't exist. We shouldn't want anyone enforcing those rules because they are bad rules. They may constitute legislation, but, as F. A. Hayek and others have taught, they are not (natural) law.

We cannot assume that populist, or unfiltered democratic, rule would be preferable in all circumstances to elitist rule. I think of the self-styled "extreme libertarian" H. L. Mencken's famous observation, "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

Take the Federal Reserve System -- please! If a gun were held on me, I'd choose the current system over a Fed run by Congress or by plebiscite. I'm not sure that's a tough call, but I'm marking on a steep curve. (Ron Paul wanted to end the Fed, not hand it over to "the people.") 

In The Myth of the Rational Voter, libertarian economist Bryan Caplan reports that surveys consistently indicate that better-educated individuals tend to give more sensible answers on economic-policy questions than the general, less-educated population do and thus are less, say, anti-trade and anti-foreign.  What might that mean for trade, immigration, and even monetary policies? Of course there shouldn't be trade, immigration, and monetary policies. They override individual freedom, cooperation, and spontaneous order.

Look across the Atlantic and consider Brexit. With good reason, a majority of Britons didn't like policies being made by distant and largely unaccountable politicians and bureaucrats. Most voters chose to exit, that is, they opted for decentralization. At the same time they favored nationalism and national sovereignty, that is, immigration control and protectionism.

Notice what wasn't on the ballot: individual sovereignty -- not just for Britons but for everyone. In the Brexit case, decentralization coincided with more national government power over the freedom to trade and to deal with would-be migrants. That's hardly a win if the standard is individual liberty. (Decentralization has a potential advantage: it lowers the cost of voting with one's feet.)

It's not that "the people" are stupid -- far from it. While most of us are reasonably competent in normal life, in the political realm we face special incentives and disincentives that make us act stupid. When one vote is impotent, why would most individuals spend scarce time and money studying complicated subjects to investigate whether to vote for Smith or Jones? They might as well vote their feelings and biases. Besides, most individual voters will bear a only microscopic fraction of the total expense that the winning candidate will help to impose. Bad incentives all around.

Admittedly, democracy as a way to pick officeholders is certainly preferable to violence in the streets, but that is faint praise. We can do better.

But we don't want an elite to rule either. Elitism's track record here and elsewhere is nothing to brag about. It includes war, depression, and other lamentable political maladies. Of course, the rejection of elitism doesn't mean the wholesale rejection of expertise, as some people seem to think. That would be irrational. Who doesn't consult a doctor when ill? No, what must be avoided is endowing select experts with access to political power. The damage can be seen in the recent pandemic.

The alternative to elitism isn't more democracy, which would trade one form of authoritarianism for another. The alternative is individual liberty in markets and civil society, and that calls for the strictest limitation on -- as we work for the elimination of -- all coercive political power. The objective is to free all peaceful relations from government. Instead of elitism and populism, let's have individual liberty and cooperation.

TGIF: Politics Corrupts Money

Money does not corrupt politics. Politics corrupts money. Politics as we know it is inherently corrupt; it's the way to select government officials,  who then use the legalized threat of physical force, and force itself, to make peaceful people do or not do things against their will. Since that's so, public problems cannot be solved by yet another measure to restrict people from spending their own money to support candidates for office or lobby elected officials. At most, it will drive any influence to less-visible forms.

Money in politics is a favorite complaint of populists across the political spectrum. Superficially it seems to be a problem. No one likes that money might count most in determining who is elected and what policies are enacted. Candidates and policies ought to be judged on merit. The popular solution is to strictly limit spending on campaigns, even by independent political-action committees, and to somehow limit lobbying by (some) interest groups and individuals after the campaigns. But those touted reforms seem undemocratic on their face. If in theory democracy is the rule by the people, why can't the people spend their money to influence "their" government? Sure, some people have more money than other people, and strongly motivated concentrated groups have an advantage over the unorganized masses, but how can that be changed without violating liberty? Maybe the focus ought to be on what government has the power to do.

Campaign and lobby finance is not as simple as the advocates of control insist it is. This is not to say that money has no relevance ever. Let's remember that the essence of government is to dispense wealth taken under threat of force from its producers. Voluntary exchange is not its modus operandi. This is so even when the government does what might be construed as generally welfare-enhancing, such as building roads or defense. As H. L. Mencken wrote in A Carnival of Buncombe, “[G]overnment is a broker in pillage, and every election is a sort of advance auction sale of stolen goods.” Any power the politicians have to help their friends at the expense of others rests entirely on the power to tax.

On the other hand, the influence of money on politics is a complicated matter and easily overestimated. Considering the size of government largesse -- the federal government will spend $5.8 trillion this fiscal year -- economists have wondered why so little money is "invested" in politics. "The discrepancy between the value of policy and the amounts contributed strains basic economic intuitions. Given the value of policy at stake, firms and other interest groups should give more," write Stephen Ansolabehere, John M. de Figueiredo, and James M. Snyder Jr., drawing on research by Gordon Tullock. (This is also helpful.) Campaign-finance restrictions don't solve the puzzle.

The reason interest groups and wealthy individuals do not give more could be that too many other things garble the connection between cost and benefit. The joints are loose. Safer investments are available. Ask some wealthy aspirants to the White House, such as former New York City Mayor Mike Bloomberg and former Texas Gov. and Treasury Secretary John Connally, who in 1980 famously spent $500,000 of his own money in his quest for the Republican nomination and bagged one delegate.

Outspending an opponent, or having wealthy supporters, is no guarantee of success. Hillary Clinton knows. A candidate still has to appeal to inscrutable voters in the center under shifting circumstances, and that process has many moving parts. The same goes for lobbying. Money can get someone access, but before a measure is enacted, Its potential sponsors will need confidence it won't backfire at the next election.

We should also ask whether people with money corrupt politicians or do people with money donate to politicians who already agree with them. The deep pockets might put money into primary candidates, but there's no guarantee of success. Small donations can add up and free media can make a difference.

It's easy to fool the voters, to be sure, but there are limits, especially when countervailing winds blow. Rich individuals and organizations on the other side of an issue are also free to spend their money on candidates and lobbying -- and they do. The progressives' "good guys" can outspend the so-called "bad guys." Alex Epstein, author of Fossil Future, notes for example that the anti-fossil-fuel lobby, which includes oil companies that are hedging their bets, far outspends the few defenders of fossil fuels. Moreover, bashing big business (with justification or not) can get politicians grass-roots donations that make up for the lack of interest-group donations.

The much-hated 2010 Citizens United v. Federal Election Commission ruling empowered unions and other incorporated nonbusiness organizations, as well as for-profit corporations, to spend money independently in support of candidates. A ban on political spending, the Supreme Court, said, is an unconstitutional ban on speech, which it certainly is. Critics of this ruling often say that corporations should not be regarded as persons. That's sophistry. Corporations are associations of persons with free speech rights.

Then there's the problem that politicians have the power to extort donations from the so-called privileged. Some years ago a book called Money for Nothing: Politicians, Rent Extraction, and Political Extortion, by Fred McChesney, showed how politicians can attract support from businesses merely by publicly talking about the need for new regulations. In effect, the politicians say: "Support me or I'll ruin your business." How much money do businesses donate in self-defense? Departures from the free market harm consumers too, so this is hardly something to welcome.

Another consideration is that even though Congress has repeatedly passed restrictions on campaign finance, many people think it has not been enough. This is despite the obvious point that limits protect incumbents since challengers are often less well-known. I suspect that the futile restrictions are intended to pave the road to exclusively tax-financed campaigns. Wouldn't forcing people to pay for campaigns violates freedom of conscience?

But the deepest problem of all is that the advocates of stricter controls want to eat their cake and have it too. They say they want democracy but not rule by the people. These advocates say they trust the voters to elect the right politicians but really think the voters are simpletons who vote according to how many times they've seen an ad on television.

Here's the knockout punch to the money critics: if they really don't want money to influence politics, they should favor prohibiting the government from dispensing favors of any kind, full stop. No one takes their money to a boarded-up shop.

If voters are merely puppets of big spenders, then maybe democracy isn't all it's cracked up to be. In fact, people face perverse incentives in the political arena (stemming from the impotence of any one vote and the dispersion of costs) that they don't face anywhere where an individual's decisions are decisive and costs are fully borne. Thus we'd be better off shrinking the political arena as much as possible.

TGIF: Games Politicians Play

Except for the civic religion on ostentatious display at the annual presidential state of the union address, one can hardly think of a reason for the tradition at all. It's not as though we learn something substantive or even hear a truthful material claim. (Yes, it could be useful in launching a president's reelection campaign.)

I'm sure someone somewhere has pointed out that democracy is not only a religion but also the opiate of the masses. When too few people could swallow the silly claim that the head of state represented the applicable deity, a new way was needed to assure the people's enduring acquiescence in their own subjugation. What better way than by having them believe that the power rested in their own hands? They had only to use it wisely (that is, by choosing those whom history if not Yahweh had ordained to rule). If they didn't, the fault was theirs alone. Thus no need for revolution or regicide. They needed only to traipse to the polls when called and participate more conscientiously in the collective exercise of their sovereignty. Helping to articulate and then loyally abiding by the General Will was the essence of freedom, after all. So stop complaining and participate civically!

The rest follows. The rites and holidays serve to remind us of our purported awesome power. Each year, then, the president goes before a joint session of Congress to report on the state of our union, with the cabinet (minus one) and the august justices of the Supreme Court duly assembled. The presidential box is graced by people who, for some very poor reason, allow themselves to be politically exploited by the occupant of the White House.

From there, it's all pretty routine, and Joe Biden stuck to the script. Take his boast about creating a record number of jobs, shrinking the deficit, controlling inflation, and the like. We've heard it countless times before. If something has gotten worse, say, crime, vow to make it better but accept no responsibility.

Never mind that the job growth (attributable to enterprise) was predictable with the waning of the Covid-19 pandemic and other factors beyond the power even of the Oval Office. Never mind that huge budget deficits loom as far as the eye can see -- Washington is addicted to spending our money -- and that the debt limit has again been reached and will soon be raised. The sky's the limit, you know. That justifies forecasts of more Fed inflation and malinvestment, then recession and involuntary joblessness.

Never mind that the federal budget line labeled "interest on the debt" continues to increase and will tower over ever more spending categories. Never mind that Biden's Buy American policy means that the government will intentionally spend more of our money than necessary in procuring materials for infrastructure projects it should have nothing to do with anyway. (And leave foreigners with fewer dollars with which to buy what politically unfavored Americans make.)

Never mind that newly proposed price controls and regulations will lower the living standard of everyone, lower-income people included. And never mind that "illegal" immigrants aren't the problem with the welfare state or the source of fentanyl. (That would be the misnamed war on drugs.)

Mind none of that. Just jump to your feet multiple times and applaud. That goes even for you good folks at home -- just in case your smart TV is watching you back. (I'm just sayin'.)

I did enjoy the lively give-and-take that went on when Biden said that “some Republicans want Social Security and Medicare to sunset.” Republicans were heard to shout back, "No!" and "Liar."

That's another game they all play: pretending that Social Security and Medicare won't crash -- sunset is too gentle a verb -- on their own without any help from Congress. Both programs will be insolvent in the short term. The implicit crash provision was built into the original legislation in the 1930s and 1960s.

But before the people had a chance even to wonder if the chief executive was indeed lying, he engaged in classic misdirection by saying, “Let’s all agree — and we apparently are — let’s stand up for seniors.”

Everyone -- yes, everyone -- got to their feet and applauded. He might as well have said, "Let's all agree that the law of gravity has been suspended!"

The Republicans of course have their own overlapping game. They brand themselves as the party of limited government (but not of limited military or surveillance) and fiscal responsibility and expect us to pay no attention to the small men behind the curtain who spend oodles of our money just like their opponents do. They are bad wizards and bad men. Since raising taxes would go against the brand, they are, despite their incessant squawking, secret agents of deficit spending, which means inflation and recession. Of course, many Republicans -- MAGA and the other denominations -- thrill to the words Buy American and to any industrial policy as long as the prefix strategic is attached. That's music to their ears. And they don't want immigrants polluting the culture or labor market. The populists of left and right are substantially of one mind.

How reassuring that it's business as usual in old D.C. Thank goodness the adults are back in charge. The civic religion can proceed with its rituals mostly intact.

TGIF: Midterm Blues

As midterm elections go, for champions of individual liberty this one could have been worse. I see two bright spots. The likely slim majority of Republicans in the House could -- maybe -- produce a measure of gridlock on domestic spending and regulation, and the blame for the Republicans' substandard midterm performance might fall entirely on Donald Trump, driving him from the stage. When you consider all the possible outcomes from Tuesday, that's not bad.

In most midterm years the only outcome worth hoping for is gridlock. Gridlock, however, wouldn't be the best outcome under all conceivable circumstances. Libertarians want Congress to get many things undone, especially but not limited to out-of-control military and so-called entitlement spending. The latter, which is on autopilot, finances programs that are facing insolvency. When that happens, today's spending, taxing borrowing, and money creation will look trivial.

But hardly anyone in power even talks about these and similar problems, so gridlock for the next two years is hardly likely to stop anything good from happening. In other words, gridlock was worth rooting for. It won't be worse than continued Democratic domination.

So regardless of what happens in the Senate, if the House goes Republican, even by the small margin that appears likely, we might see it block the most egregious domestic spending and regulatory measures proposed by Joe Biden and the congressional Democrats. I'd keep an eye on any more energy bills intended to interfere with the use of fossil fuels. Not that Republicans are reliable when it comes to opposing domestic spending -- far from it -- but we can hope. On the other hand, don't look for a freeze, much less a reduction in military and related spending. Republicans have not lost their commitment to the warfare state. 

As noted, the other good news from Tuesday was the poor showing for Trump, some of whose favorite candidates lost. Not all of those he endorsed bit the dust, but some key ones did, such as in Pennsylvania and New Hampshire. He may yet be disappointed by still-undecided races in Arizona, Georgia, Colorado, and elsewhere.

I'm hoping that Republicans will blame Trump for their party's poor showing in the midterms. The out-party is supposed to make big gains in Congress, in governor's mansions, and in state houses, but the Republicans did not do it. This happened in a year when the voters' top concerns were inflation and crime, and with an unpopular Democrat in the White House. Who or what else could be responsible for the lackluster midterm performance if not Trump?

So if Tuesday's results play a role in convincing Trump to stay out of the 2024 presidential election, we can breathe a sign of relief. Liberty would be better off without his toxic presence. (This is not to say that Ron DeSantis, who would be the chief beneficiary, offers any hope.)

With another election behind us, it's worth remembering what a fraud electoral politics is. Campaigns are little more than performance art -- bad performance art. The skill that ignorant voters tend to reward is a candidate's mastery at delivering a particular tribe's or coalition's talking points. Much of what elected officials do is interfere with our peaceful productive endeavors, but how many voters know anything about economics? Without that knowledge, all that's left are cosmetics and rhetoric that reassures.

The candidates typically don't know anything either, but they and their handlers do know that the voters are ignorant and thus are suckers for comforting soundbites. It's just a matter of which candidate gets more of his or her tribe to the polls.

If you can see in this any resemblance to selecting office holders according to their actual knowledge, judgment, competence, and integrity, let me know.

I'm not implying that politics could be better than this. The problems are inherent because government is a top-down way of attempting to organize society that cannot help but violate individual liberty. What I'm saying is that at best politics is show-biz by other means. 

So as usual, the election gave us both good news and bad news. The good news is that the losers lost. The bad news is that the winners won. 

TGIF: Election Day 2022

Another election day is upon us. We're told that we have a duty to vote because so many Americans gave their lives for that right. But perhaps it ought to be spelled R-I-T-E, as in a religious ritual.

Is it a duty or a right? Let's make up our minds. In 21 countries voting is mandatory -- although the law is not always enforced -- but that absurd idea has never had traction here. There is something weird about an alleged right that one is compelled to exercise. It certainly would be unique.

And did Americans really fight wars for the vote? Many who were killed in wars that the government tricked them into fighting might have thought they were risking their lives for freedom, but the freedom to vote probably didn't rank high on the list. Americans certainly died in the domestic struggle for full citizenship -- civil rights-- which includes the vote, and I don't mean to disparage that struggle.

I'm saying that the freedom to govern one's own life is more important than the vote, and deep down people know it. In our private lives individual action really counts: we tend to reap the lion's share of the benefits and pay the price of our actions. When I go to the supermarket to buy eggs, I am confident that I'll bring home eggs. Virtually all the costs, both in time and money,  and the benefits are mine; thinking about them is how I decide if going to the supermarket is worthwhile in the first place.

Voting is different. Individual action is almost always indecisive -- each person has only one vote, and the costs and benefits of each person's decision are widely and thinly dispersed throughout society. That disconnect breeds irresponsibility.

Imagine if we shopped for groceries the way we pick rulers. On Shopping Day you would walk into the supermarket and see before you two (maybe three or four) sealed pre-filled shopping carts. Each cart has a different selection of products. Your task is to vote for a cart from among the candidates. That may not be easy. Undoubtedly, you would like some of each cart's contents and dislike others. You would have to decide which one has more of what you want and less of what you don't want. And no, you would not be to able exchange items with other people.

So you would mark your ballot and then return home to watch the election returns. The cart that you get to bring home is the one that wins 50 percent plus 1 of the votes or perhaps a plurality. Of course, it may not be the one you voted for. Oh well. (To make this even more like politics, the cart you bring home isn't exactly like the one you saw in the supermarket. Campaign promises are notoriously ephemeral.)

I submit that that would be a stupid way to shop for groceries. But that's the system we use to pick the people who are empowered to meddle in our lives, embroil us in war, and do other foolish things that no one has any business doing. I acknowledge that voting is preferable to violence for selecting rulers, but when Churchill said democracy beat any alternative, he overlooked a contender: consistent liberalism (libertarianism), which does not allow majorities to negate individual rights.

Mathematically, one vote is rarely decisive and that's only in the smallest jurisdictions. As the late public-choice economist Gordon Tullock pointed out (watch the video "Voting Schmoting"): "It’s more likely that you’ll get killed driving to the polling booth than it is that your vote will change the outcome of the election."

No election in my adult lifetime would have turned out differently had I done something other than I did on election day. Not one. While the smaller the vote pool, the greater the chance of a tie, greater is not the same as great. In most places that chance is insignificant. People still talk about how close the 2000 Bush-Gore vote for president was in Florida. But the margin there was 537 out of nearly six million votes. As far as I've been able to determine, no individual Floridian cast or declined to cast 537 votes that day.

So when the good-government types tell you to get to the polls because "every vote counts," you know not true. It is certainly true that the winner by definition must have more votes than the loser. (Presidential elections are more complicated, of course.) But each person has only one vote, and it will make no difference. The only action you can control will not decide the outcome.

Someone might object that although your chance of casting the decisive vote is typically only the tiniest bit above zero, you won't know for certain how things will turn out until the votes are counted -- so you'd better vote. But if that were the right way to look at it, playing the lottery would be a good financial strategy because your chance of winning, no matter how small, is greater than zero. But it's not a good strategy. Except in truly desperate circumstances, we don't usually undertake a course of action unless we see a reasonable chance of success. That's how we avoid wasting scarce time, energy, and resources. Instead of voting, perhaps your time would be better spent doing something that has a reasonable chance of making a difference in some way that matters to you. Every action -- including voting -- has opportunity costs.

Tullock wasn't telling people to stay home on election day. He pointed out that many people vote because they like to vote, and he meant no criticism of them. Voters can have many reasons for liking that activity, such as feeling part of a like-minded group of people. Tullock simply thought that aiming to determine the outcome of an election is a bad reason to vote.

People can also have good reasons to dislike voting. They may not want to participate in a civic religious-style rite, which apologists for the government power will invoke in order to blame the voters and excuse the politicians and bureaucrats for bureaucratic incompetence and misconduct. If "we are the government," as we are often told, then the fault must lie in ourselves. But are we the government? Or is popular sovereignty the secular equivalent of the divine right of kings -- a fiction to rationalize an elite's power over us? (See the section titled "The Fiction of Representative Government" in my article "The Misrepresentation of Health Care Reform.")

One last thing: we are also told that if we don't vote we have no grounds to complain. That fallacy was put to rest in 1851 when the classical liberal Herbert Spencer pointed out that, apparently, voters have no grounds to complain either because those who voted for the winner got what they wanted and those who voted for the loser accepted the rules of the game. So everyone must shut up and obey. How convenient.

TGIF: Sam Harris on Saving Democracy from Voters

Neuroscientist/philosopher Sam Harris caused quite a stir recently by defending the social networks' conspiracy (his word) to suppress news coverage of Joe Biden's son Hunter's smoking-gun laptop shortly before Election Day 2020. Harris said the suppression was justified because Donald Trump was such a threat to America that he had to be defeated whatever the cost to the election's integrity.

In other words, according to Harris, such tampering is okay as long as he deems it necessary to save American democracy from the voters.

The social networks are privately owned, of course, but remember that Facebook chief Mark Zuckerberg has acknowledged that the FBI warned him, shortly before the New You Post broke the laptop story, that unspecified major Russian disinformation aimed at the election was about to surface. The authenticity of the laptop, with its damaging emails about Hunter Biden's lucrative business dealings with Ukrainian and Chinese entities while his father was the vice president, was known early on and has since been confirmed by others. Even the New York Times now concedes it. Allegations of Russian election tampering had as much merit in 2020 as they had in 2016, when Trump was portrayed by his critics as a Russian stooge.

But with or without prodding from the FBI, the social network operators, should not have suppressed the laptop story for a host of obvious reasons. These businesses acquired huge numbers of participants on the promise that they would be open forums. When they first began to interfere with that process, the networks let users down. To do this during a presidential election is a particularly egregious disservice. Why do people still depend on them for information? (No, this does not justify antitrust action.)

I leave it to others to debate whether Harris's assessment of Trump is accurate. I'm more interested in the principle Harris has set out.

Although I am as far from Trump fandom as anyone could be, the first question I would ask Harris is whether he considers himself the only person wise and trustworthy enough to decide if a candidate is sufficiently threatening to justify concerted suppression of unflattering information about the other candidate. If he says yes, then he's as self-centered as Trump. If he says no, he might do us the courtesy of spelling out how that decision would be made. Does he want a constitutional office created? How would the decider be chosen?

If he were to answer my questions, I would move on to this one: what makes him think that if his principle was adopted, he would like its future applications? Supreme Court justices have often disappointed the presidents who appointed them. For similar reasons, the decision makers anointed to carry out the Harris principle might somewhere along the way disappoint him. Harris must be a lousy chess player because he doesn't think even two moves ahead.

Still, Harris's remarks do raise an interesting dilemma. It's not a new conundrum: what if democracy looks to be on a suicide course? Does the "sacred" principle of majoritarianism, which libertarians as individualists abhor, extend to the principle itself? Or is it proper to cripple democracy to save it?

Small-d democrats might say, "Yes -- temporarily." But there's the rub. The future is uncertain. Temporary in intent is not necessarily temporary in fact. Governments taught us that long ago. We know that people don't like to give up power, as Lord Acton taught us. Power doesn't only tend to corrupt; it attracts the already corrupt. Wouldn't that suggest that democracy should never be suspended or tampered with in the present for fear that the winner of an election might suspend or tamper with it in the future? What say you, Sam Harris?

If this problem is addressed only after it arises, it's probably too late. The time to think about it is before a democracy with few real limits on power is launched. The War Games line, spoken by the computer after learning that nuclear war is futile, applies: "The only winning move is not to play."

It's not as if the original classical liberals and their libertarian descendants didn't warn us. Individualist political economists and social philosophers long ago pointed to the dangers of a democratic state with the power to meddle in all aspects of people's lives. For these thinkers, the whole point of laissez-faire in the age of democracy was to keep elected rulers, and thus the electorate itself, out of our private peaceful productive affairs so that the contest for political power would not become socially and economically disruptively cutthroat. When the government is just about omnipotent, everyone will want to get to their hands on it -- if only for defensive purposes.

Even if those pioneering political economists did not want to dispense with government entirely (a few did), they understood that society essentially runs itself without a heavy-handed state because people generally understand that their best interests are served through cooperation with others. Thomas Paine, for example, in Rights of Man wrote:

Great part of that order which reigns among mankind is not the effect of government. It has its origin in the principles of society and the natural constitution of man. It existed prior to government, and would exist if the formality of government was abolished. The mutual dependence and reciprocal interest which man has upon man, and all the parts of civilised community upon each other, create that great chain of connection which holds it together. The landholder, the farmer, the manufacturer, the merchant, the tradesman, and every occupation, prospers by the aid which each receives from the other, and from the whole. Common interest regulates their concerns, and forms their law; and the laws which common usage ordains, have a greater influence than the laws of government. In fine, society performs for itself almost everything which is ascribed to government.

Thus, at most, governments should be kept on a short leash, with their powers dispersed and their missions held to the barest minimum necessary to protect the peace, that is, individual rights. If we can eliminate the state altogether, even better!

What the good liberals didn't tell us -- because there's no magic formula -- is how to keep government to the bare minimum. Constitutions are no guarantee, are they? Today's libertarians are still working on cracking that nut. Most people are not going to read books on political philosophy or economics, even something as accessible as Frédéric Bastiat's The Law. So somehow we must strive to create a taboo against asking the government to do anything more than keep the peace in ways that respect everyone's rights. How do we do that?