Democracy Really Isn’t Democratic, but Markets Are

The presidential campaign is just a few months old but it already feels like years. Luckily, according to the calendar less than a year remains.

The preposterous and outrageous promises of presidential candidates should remind us that politics is a truly awful way to make decisions. Tell people who don’t know much about public affairs to select one ambitious, ignorant, self-serving narcissist to run the government, and thus micro-manage Americans’ lives. What could possibly go right?

By its very nature politics is democratic only in process, not substance. That is, everyone (well, most everyone anyway) gets to cast a ballot for candidates. But in most races only one person is elected, almost immediately disenfranchising half or even more of the population (in a multi-candidate race).

Moreover, citizens must choose between complicated packages of beliefs that may not represent them. For instance, a typical libertarian wants a small government that protects markets and civil liberties at home and promotes peace abroad. But Republicans and Democrats virtually never hold to all of those positions.

Then there are bureaucratic incentives. As public choice economists pointed out, government agencies have interests. The governing process often is the antithesis of the democratic process.

Worse, substantive outcomes also are winner-take-all. A law or regulation might be a compromise between different factions, but it imposes one policy and is mandatory. You don’t get to choose whether to obey, what to do, or how to do so.

Of course, some decisions can have only one outcome. That’s why politics is an unfortunate necessity. But most life decisions need not be imposed through a winner-take-all process.

However, as government has expanded, it has turned ever more issues into mandatory exercises. Employment, education, health care, housing, transportation, and more increasingly have been taken over by government. Whenever the state moves in, private choices move out. Democracy becomes ever less democratic.

Consider health care. There are few more personal issues that require an individualized response. Yet Washington now is deciding on most everyone’s health care plans. Don’t like the options available. Tough.

Indeed, government control, highlighted by the fact that almost half of all health care spending comes from the state, is edging ever closer to vesting politicians with the decision over who lives and dies. Medicaid and Medicare already are effectively moving many of those decisions into the public realm. Obamacare takes health care another step in the direction of coercive monopoly.

Ironically, while the left long argued on behalf of what it called “economic democracy”—letting people vote on politicians who then will run the economy—markets provide real economic democracy. Even if we are part of a small minority, someone somewhere is likely to cater to our tastes, whether involving cereal, toothpaste, furniture, clothes, vehicle, luggage, or much more.

So too, as I wrote for the Freeman, “it could be with health care. Prepay medical treatment in the form of ‘insurance,’ choose catastrophic coverage only for expensive crises, or self-insure. Decide on an unrestricted fee-for-service policy or a health maintenance organization. Sacrifice everything for a few more months of life or spend more freely before and plan on letting go without extraordinary care. There’s no one right decision. So there shouldn’t be one government policy.”

Moreover, accountability in the marketplace is continuous. Once elected, a president has four years to mess up before voters have a chance to pass judgment on his or her performance. In contrast, if you are dissatisfied with your brand of soap or cereal, car mechanic or chiropractor, university or trade school, you can change tomorrow. What could be more democratic than that?

Long ago Prussia’s famous Iron Chancellor Otto von Bismarck opined that no one should want to see his sausages or laws being made. How true. We should worry more about what decisions the president gets to make than who becomes president after next year’s election.