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The Limits of
Democracy
by Samuel Brittan
The present "Democratic Crusade"
The motive for this talk is the way in which Western
leaders have debased "democracy" by using it as a slogan to cover all desirable objectives.
This is a common failing of both those who call themselves neo-conservatives and those who
slightly more reluctantly call themselves liberal imperialists. Both schools are
interventionists on an enormous scale. The main difference seems to me that the neo-
conservatives are happy to use as their weapon the military might of the United States,
whereas the liberal imperialists put more trust in the UN and other international organizations
.
If I tried to discuss the history and many meanings
of the word democracy I would run out of time while still on the subject of definitions. Many
dictionaries define it as rule by the people, which relates it to its Greek origin. But the people
cannot rule. Even in the tiny electorate of a Greek city state, the whole citizen body could not
command armies or supervise the erection of buildings like the Parthenon. What they could
do of course was to have frequent votes on what should be undertaken and who should be
given command.
The highest common factor of most concepts of
democracy is voting. Hard boiled realists like Joseph Schumpeter saw it as !I an arrangement
in which individuals acquire the power to decide by means of a competitive struggle for the
people's vote.” (Capitalism, Socialism and Democracy, first published 1943. P.
269) The British politician and jurist Lord Hailsham spoke of "elective dictatorship."
(The Dilemma of Democracy, Collins 1978) .Karl Popper saw it as the best
known method of changing the government without the use of force. Winston Churchill
regarded it as a very bad system; but all the other systems he knew were worse.
There are of course many other many other concepts
of democracy. At one time I used to be invited by the EU Commission to chair a public
discussion each spring. On one occasion I asked from the floor whether it would be possible
to have the European Union without the "social partners". Nearly everybody on the platform
was shocked and many people came up to me during the refreshment interval telling me how
anti-democratic my question was. It may be coincidence that the run of invitations stopped
after that particular meeting .
I have since been reflecting on this experience.
What I came up against was what I may call the EU Corporatist Model. This is essentially
balancing of interest groups. On this basis you need to bring together the farmers, industrial
workers, merchants, business managers and all the other main actors in the economic game.
And you might for good measure add another group called consumers, although they are a
more widespread and less specific group whose representation tends to be taken over by
political activists with their own agenda. Into this interest group conception, "Social Europe"
with its partners from business and the unions as well as governments fits very well.
What is wrong with this model? It is possible to
have a supposedly fair balance between all the different interest groups and yet leave the
consumer and the voter worse off. He or she may not realize this until there is a crisis which
makes much of the protective structure untenable. I have spoken extensively elsewhere about
the economic dangers it contains. My concern here is that it leaves totally out of account the
individual citizen who is not represented by these interest group bureaucracies: the
unemployed worker who is priced out of a job; the person whose earnings are held down by
compulsory retirement ages or working hour limits, the unorthodox craftsman who does not
possess approved accreditation, and so on. I am going on to say however that such
oppression of minority or excluded groups can occur even in more classically democratic
systems.
There are of course left wing radicals who do not
much like either representative democracy or the European Corporatist Model. They see both
as essentially fraudulent and would like to extend majority voting to the running of most of
our everyday affairs: for instance the election of business management by workers, of health
service authorities and even judges by local residents. Anyone with experience of these
matters will know this means, at best disproportionate influence for those who have a taste
for committees and management, and at worst those who like bossing other people around.
But I shall talk mainly about national government today.
Traditional Fears
Nowadays the term democracy is only applied if the
mass of those whose interests are concerned have a vote. But it would be pedantic to speak
all the time of mass democracy. For that is the only type of democracy that is promulgated
and praised today. Many political thinkers of the 19th century , liberals as well as
conservative, saw and feared its advent. There were those who feared that it would lead to the
poorer majority confiscating the wealth and incomes of the better off minority and their
property .There were others such as the soft Marxists who hoped for just this result.
Yet it has not so far happened. Although the share of
state spending in national product and the tax take are higher than many in this room would
like, there has been no general confiscation of higher incomes or property .I know that the
German ruling party is fighting the coming on the slogan of higher taxes for the rich. But
with all due respect, and without presuming on the result of the forthcoming federal election,
the international trend has been the other way since the 1960's.
If I can offer a personal illustration: I attended a
couple of discussions with a British left of centre group on topics such as inheritance tax and
effective taxation of land values . You may want to throw me out of the room for saying this;
but if we have to have some taxation, the taxation of pure space and at death are probably the
least harmful methods. Yet the members of this radical group most in touch with practical
politics gave a strong caution that pursuing such proposals might endanger 50 parliamentary
seats and thus put at risk the ruling British Labour party's majority in the next parliament.
Why have the hopes of the soft Marxists and the
fears of the classical liberals been equally confounded, at least so far? Sociologists, many of
whom are disappointed by what has happened, talk about adoption by the working class of
bourgeois life styles. But there is a more parsimonious economic explanation. Instead of the
pyramid type distribution of income and wealth with an impoverished proletariat and a rich
bourgeoisie that most socialists originally envisaged, we have had instead a diamond-shaped
one where both the really poor and the really rich are minorities. In between there is a large
body of citizens with some stake in not killing the goose that lays the golden eggs. For what
it is worth, British opinion poll experts classify almost half the population as middle class;
another half as working class and a statistically negligible proportion as upper class.
In addition to his own stake the median middle class
voter , who may not personally be at risk of very high marginal tax rates, may aspire to a
higher rank for himself or his children and would not like to cut off hopes of material
advancement. Moreover the stake that many people have in pension schemes gives them an
interest in the continued growth of profits and dividends.
But be careful, while it is not true that the rich are
getting richer and the poor are getting poorer – as most people in the arts and media
worlds seem to believe – there has been a renewed growth of relative income and
wealth at the top of the distribution, thus partly reversing some of the post World War Two
trends. This has fuelled a reaction against so-called "Fat Cats ". Part of it is justified insofar
as it is due to corporate executives abusing their position to raid their shareholders. But the
popular reaction is not discriminating. The successful business pioneer is little more loved
than the kleptomaniac corporate bureaucrat.
There seems to be a pecking order in envy and jealousy. Sportsmen and
pop singers get away with their wealth in public opinion; winners in lotteries and similar chance
events come next in the toleration stakes. People engaged in difficult-to-understand financial
transactions such as hedge funds incur the greatest odium and businessmen in charge of more tangible
products and services come somewhere inbetween.
There is another danger too. This is that the golden
era of equity appreciation, which reflected a once-for-all catch-up, is almost certainly over;
and pension funds are likely to disappoint many of the hopes invested in them. But as one
pillar of support for a necessary degree of "inequality" withers away another may take its
place. I refer to the likelihood of pension funds and small investors shifting their funds to
land based investments which are likely to enjoy a secular boom.
A more subtle danger of democracy has been emphasized recently by Hans-Hermann
Hoppe of the American neo-Austrian school. This is an excessive rate of time preference for
the present against the future (Democracy – The God That Failed, Transaction
Publishers, 2001) It is captured by the slogan "In the not so long run we are all out of office "
.By contrast hereditary monarchies had some interest in the longer term tax yields of their
territories.
The case is best made for the English-speaking
countries such as the US and the UK. These are running high and rising budget and current
balance of payments deficits financed by the savings of the rest of the world. But savings
ratios in hard core old Europe and Japan, are still around 20 per cent of GDP. The really large
savers are Japan and even more Far Eastern countries such as China which do not qualify as
democracies and which has an officially estimated gross national savings ratio approaching
50 pc. The world as a whole is suffering from an surplus, of attempted (ex ante) savings
relative to investment opportunities. So this particular accusation is for the time being “not
proven.”
Voting Paradoxes
There are other demonstrable weaknesses of
democratic systems which I shall only summarize The very concept of majority voting is far
from clear. Some two and a half centuries ago the Marquis de Condorcet showed that if there
were a choice between as few as three policies – A, B and C – it could easily
occur that A was preferred to B, B was preferred to C but C preferred to A; and that much
depended on the order in which the alternatives were put. (He was guillotined for his pains).
In the mid 20th century the American economist Kenneth Arrow established that there was
no voting system that could be assumed to satisfy a few elementary rules of fairness.
Even if majority voting is accepted as an ideal, it is
difficult to realise in actual electoral systems. It seems scandalous that the UK Liberal
Democrats with 22 per cent of the votes achieved less than ten per cent of the seats. (In early
elections the discrepancy was even greater. ) These inequities have been highlighted further
by the fact that in the last British election the Labour party received 36 per cent of the votes
on a turnout of only 61 per cent, but gained 356 out of a total of 645 seats. It looks then as if
Britain is to be governed by the inclinations of a minority of less than 22 per cent of adults. Is
this a scandal?
Is it better to have a system close to proportional
representation or should countries such as the US and UK stick with first past the post. At
first sight yes. But if we think of democracy as decision rule, the issue is a little more
complicated. At times when radical reform is needed, such as in the Britain of the late 1970s,
first past the post enabled the government such as Margaret Thatcher's to take unpopular
initiatives and allow the electorate to vote subsequently on the results. In Germany today the
combination of proportional representation plus the need on many issues to get a majority of
the regional governments as well, put the break on needed reform. Alas there is no God to
vary the constitutional rules according to particular circumstances.
"Rational Ignorance
The voting paradoxes are not the worst weaknesses
of majority rule. A true "economic man" would not vote at all because the chances of his
choice influencing the outcome are minuscule. Many people, happily, are not that
egoistically "rational". But the incentive to consume time and energy in a study of the issues
is small. Schumpeter remarked that even a highly educated lawyer would normally devote
less attention to political issues that to his weekly game of bridge. Modern American
economists have dignified this common sense insight with the name of rational
ignorance.
The extreme version of the voting paradox depends
on a very one sided view of human nature. But it does lead to some insights. For instance a
low turnout is not always bad. In the recent Iraq election the turnout was 58 per cent, only a
couple of percentage points less than the British one, in spite of the physical perils involved
in voting. This could be because far more was at stake than most western countries, where a
low turnout may be a sign that not too much depends on the outcome. In 1945, some Greeks,
in the middle of their own civil war, hearing that Churchill had been defeated in the British
election, asked whether the Conservatives had taken to the hills.
Economic and other Defects
I will summarize briefly the well-known weaknesses
of democratic capitalism. There is the concentration of producer interests and the dispersion
of consumer ones. The beneficial impact of any one protectionist measure on an individual
via his professional or geographical interests is far greater than any loss he may bear along
with tens of millions of other consumers.
The citizen may well lose far from than he gains
from the sum total of restrictive measures encompasses the whole field of economic activity
.It might pay him to do a deal whereby he renounces his claim to special producer privileges,
provided that every other interest group did the same. Milton Friedman has often canvassed
arrangements along these lines. Yet it is extremely difficult for such a bargain to be
negotiated without the assurance that it would be enforced across the board with the
minimum of exceptions, Such tradeoffs are most likely after a lost war or revolution when
previous interest groups have been destroyed and there is little to loser from starting with a
clean sheet. A producer group would rightly think twice of giving up its protection and
privileges. (I have discussed these and other aspects in more detail in Economic
Consequences of Democracy, Wildwood House, 1977 and 1978, Part IV. See also the
works of Mancur Olson).
There is a still more fundamental defect. The
political markets cannot provide collective services or different policies to suit different
tastes. In the private market we can, subject to our personal budget constraints, make our own
decisions about how much of a service or what kind to buy. A collective choice on the other
hand has to be made for everyone centrally. American political economists call this full line
supply.
Democracy not same as Freedom
This brings me to my central point. Most of us here
would probably agree that majority voting is a means and not an end. Underlying values for
most of us here are not majority voting but other ends, including personal freedom: what
Isaiah Berlin called negative freedom. Incidentally freedom and choice are not quite the same
thing, although a classical liberal may value both. (The differences and similarities between
the two concepts are discussed exhaustively in my Restatement of Economic
Liberalism, London Macmillan 1988, Page 41 et seq.).
Personally I do not think they are the only values.
Prosperity for instance also has value. So has humanity in the penal system and other
institutions. Nor do I think that one value can just be deduced very easily from another. It is
our good fortune that what Adam Smith called Natural Liberty often promotes prosperity. But we go
wrong if we equate the two.
There is nothing particularly liberal in the absurd
objective of maximizing the growth of GDP. If believers in the so called Anglo Saxon
capitalist model criticize the European Social Model it should not be because of comparative
growth rates but because artificial restrictions and disincentives prevent people from making
their own choices.
I know that some of you here are followers of von
Mises, who stated that the cardinal principle of liberalism is private property. If this means
personal property, it is true almost by definition. If I do not have objects and territory which
I can call my own my freedom of action is very limited. But wider property in the means of
production, distribution and exchange has to be justified pragmatically by results, as it can
be.
It is because economic freedom is for me only part,
however important, of personal freedom that I have always been very suspicious of the
league tables of economic freedom prepared by various free market institutes. They might be
useful as an input into econometric studies of the growth process. But tables in which Hong
Kong and Singapore rank above New Zealand and Denmark (Heritage/Wall Street
Journal; also Fraser Institute) are worse than useless as a way of evaluating societies.
The relationship between democracy and freedom was stated very succinctly by
Schumpeter long ago. "If everyone is free to compete for political leadership by presenting
himself to the electorate, this will in most cases though not in all, mean a considerable
amount of freedom of discussion for all in particular, it will normally mean a considerable
amount of freedom of the press. This relation between freedom and democracy is not
absolutely stringent and can be tampered with. … At the same time it is all there is. .." (Ibid p
.272-3).
He was realistic enough to see that between the ideal
of "free competition for a free vote" and complete dictatorship "there is a continuous range
of variation within which a democratic method of government shades off into the autocratic
one by imperceptible steps."
I fear that the difference between a democratic
society and a free one will one day be demonstrated in a most clear cut fashion when a
fundamentalist majority takes over control of some country, probably in the Middle East,
after an indisputably fair election. I will not cite Iran as an example because of the doubts
about the fairness of the election. But sooner or later there will be a tyranny indisputably
imposed by majority rule. I fear that Russia under President Putin, who at least at the
beginning enjoyed overwhelming majority support, will provide us with growing evidence of
the difference between a democratic society and a free one.
Non-stop Referenda
Most of the political text books say that direct
democracy on the Greek pattern is impossible in a large modern state. But it is becoming
more possible every day. Modern electronics brings the prospect of continuing referenda on
every subject under the sun on the local, national and international levels nearer and nearer.
This is aside from the use or misuse that politicians make of focus groups.
What then is wrong with the idea of continuous
voting on one subject after another? To say that it may have worked in the special case of
Switzerland does not dispose of the issue. This is an easy question to answer for either
conservative authoritarians who are happy to assert that people do not know there own
interests and that either traditional rulers or scientific experts know them better. It is also easy
for Marxists who believe that people are affected by false consciousness and that their
interests must be interpreted by a proletarian vanguard.
The issue is also easier for an anarcho-capitalist or a
believer in an extreme night watchman state. He can simply say that the commercial market
is a continuing referendum whereby different preferences can be satisfied and their degree
also taken into account. It is much more difficult for the classical liberal who accepts that
there are fairly extensive services that a modern government has to provide whether on a
national or local level and who also takes seriously the externalities and public goods which
require policy intervention even after allowing for the defects of the political process. We
may believe that people, if not the best judges of their own interests, are better than
committees of so called experts and wise men. Nevertheless they are not very good at
deciding on the policy framework in which these freedoms can best be exercised. How then
can we preserve or move towards a state which can fulfill its core functions but does not
oppress minorities and attempts to provide for as many different preferences as possible.
Democracy and War
I cannot close without tackling the widespread view
that democracies do not wage war against each other. My search for evidence has led me to a
landmark study by the US political scientist Bruce Russett, Grasping the Democratic Peace
(Princeton 1993). His main evidence is a table of disputes between 1946 and 1986 showing
no wars between democratic states and 32 wars when one or other parties to the dispute was
non-democratic.
His greatest difficulty is in covering the period
before World War One when many countries were somewhere between democracies and
autocracies. He deals with World War 1 by emphasizing the limited power of the German
Reichstag, which could be overridden by the Kaiser on many matters.
This frankly will not do, if we want to move from
formal theories to the realities of popular pressure. To the chagrin of those who believed that
wars were capitalist conspiracies, the social democrats in the Reichstag voted
overwhelmingly for war credits. No reader of the memoirs of Bertrand Russell can forget his
sense of isolation when he walked the streets of London among a population that was
overwhelmingly bellicose.
The most one can suggest is that the mass public
tires of war more quickly than elite groups. Examples include the German and Russian
revolts at the end of World War I and the movement of American opinion against the
Vietnam War.
But even if the Russett conclusion were completely
solid this would provide little consolation, as the majority of conflicts since the end of the
Cold War has involved on one or both sides countries which were far from being textbook
democracies. To be fair: Russett himself was from starry-eyed in his conclusions .Looking
ahead he presciently warned that the model of "fight them, beat them, and then make them
democratic” is irrevocably flawed. He foresaw the danger of nationalist or ethnic quarrels
among successor states of the former Soviet empire. He also foresaw that the initial creation
of democratic institutions could contribute to the explosion of ethnic conflicts by unleashing
expressions of hatred and oppression which were suppressed under Communism.
Democracy can be a very weak barrier to war. If I
remember Thucydides correctly the Athenian assembly, spurred on by demagogues, was
often an influence for more aggressive action. In our own time Ariel Sharon has been
returned to office in free elections. The most one can say is that his more pacific opponents
have a freedom of expression they would not have in most dictatorships.
The real problem is the propensity of human nature
to divide the world into one's own group and strangers outside it. If I knew how to tackle this
deep-seated trait, I would deserve the Nobel Peace Prize. In the meanwhile one has to
concentrate on deterrence, conventional diplomacy and piecemeal efforts such as Daniel
Barenboim' s Arab-Israeli orchestra. But it will not help to pretend that the masses have
superior self-restraint to those who try to lead them.
Conclusions
I cannot wave a magic wand to banish the
potentially oppressive aspects of extreme democracy. But there are a few suggestions that
can be made.
First there is terminology. We should
never, never, never allow ourselves to use the word "democratic ", unqualified as a
shorthand for a desirable political system. We should also abjure associated ideas,
such as talking as if the European Union simply suffers from a democratic deficit, and that all
would be well if that disappeared. A European Commission with increased powers elected by
an enthusiastic 60 per cent of European electors could still be an instrument both for
oppression and incoherent policies.
I would like to say that we should talk instead about
an Open Society where people are free to lead their own lives without fear of the government
of what their neighbor will say. But not only does this slogan mean different things to
different people; it is no longer very familiar to generations of people who do not know
Popper's work with that title. It might help to go back to the old slogan of "freedom and
democracy" now that it can be used without the Cold War connotations and the selective
interpretation to favor America's allies of the moment.
There will of course remain many contexts in which
we cannot prevent participants in the political debate from talking of democracy as the main
goal. We should always politely but firmly insist on qualifying it by such terms as
constitutional democracy or liberal democracy .By this we are clearly indicating that not
every whim of a temporary majority or plurality has to be instantly satisfied.
It is more difficult to frame institutional proposals of
a non-Utopian kind. It is best to emphasize the various constraints that already exist in many
countries that put a break on elective dictatorships. One example is a separately chosen
second chamber. The precise methods of appointment of this chamber is less important than
that it should not be appointed by popular voting at the same time as the election for the main
parliament. Otherwise it will be just a rubber stamp.
Human rights can be entrenched by legislation that
is somewhat more difficult to reverse than most other laws. Liberal institutions such as the
Strasbourg Court of Human Rights or the UN convention which mainly deemed negative
freedoms should be sharply separated from the Charter of Human Rights affirmed by the
European Union which imposes positive policy obligations in the social field. There can also
be constitutional courts to review legislation as in the case of the US Supreme Court. Such
review can also be brought about by the normal courts gradually enlarging their function as
in Britain; or by bodies such as the German Constitutional Court.
The exact procedures obviously vary from country
to country. What matters most is what is known in Anglo Saxon jurisprudence as "due
process", which means that government decisions cannot be made at the whim of the head of
government and a few soulmates sitting on a sofa. I am afraid that the country from which I
come, Great Britain, has approached nearest to this kind of unprincipled elective dictatorship.
On reflection, I believe that it is the careful use of
words that is most important; and it is where a group such as this can achieve most good.
Above all never let anyone, however eminent, speak of democracy as a shorthand for
everything politically desirable or let President get away with treating "freedom" and
"democracy" as synonyms for each other. They are not.
Samuel Brittan is a columnist at the Financial Times (London). His most recent
books are Against The Flow: Reflections Of An Individualist; Capitalism
With a Human Face and Essays, Moral, Practical and Economic. He is an Honorary
Fellow of Jesus College, Cambridge, an Hon. Doctor of Letters (Heriot-Watt University,
Edinburgh) and an Hon. Doctor of the University of Essex. He has been visiting Professor at
the Chicago Law School, a Visiting Fellow of Nuffield College, Oxford, and an Honorary
Professor of Politics at Warwick. He has been awarded the George Orwell, Senior Harold
Wincott and Ludwig Erhard prizes. He was a member of the Peacock Committee on the
Finance of the BBC (1985-86). He was knighted in 1993 for "services to economic
journalism" and also became that year a "Chevalier de la Legion d'Honneur".
This speech was delivered at the 2005 International Society for Individual Liberty's Freedom
Summit in Gummersbach, Germany – July 15-2005.
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