Democraphobia Goes Mainstream (Sort of)

This op-ed from Tapu Misa contains an odd mix of democraphobia (yay!) and statophilia (boo!). First the good:

The catalyst for the march was the Government daring to ignore the result of the recent ambiguously worded citizens-initiated referendum on the child discipline law.

Which means the Government is clearly undemocratic. “The people are the boss and the Government has to listen to them,” said Craig.

Well, yes and no.

The trouble with the might-is-right, majority rules brand of democracy has always been painfully obvious for those of us accustomed to occupying minority perches.

As Benjamin Franklin put it: “Democracy is two wolves and a lamb voting on what to have for lunch.” In a straight-out numbers game, the lamb always loses.

I couldn’t agree more. She goes on, however, to defend a utopian version of representative democracy:

But representative democracy, as advanced by 18th century British MP Edmund Burke, promotes a higher ideal built on notions of the common good.

Burke felt MPs weren’t just delegates, elected to do their constituents’ every bidding. While “their wishes ought to have great weight”, he argued that an MP’s “unbiased opinion, his mature judgment, his enlightened conscience” ought not to be sacrificed in the process.

“Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.”

True to his convictions, Burke backed several unpopular causes during his time in Parliament, knowing that it would probably cost him his seat (which it did), but determined to show “that one man at least had dared to resist the desires of his constituents when his judgment assured him they were wrong”.

He was right. Sometimes, the people can get it badly wrong.

Yes, they can. But so can those representatives they elect to lead. Afterall, they are elected by those same people who sometimes get it badly wrong. Representative democracy does have the capacity to mitigate the effects of moral panics and other short-term fluctuations in preferences. It does this by introducing some inefficiency into the transmission of preferences into policy, however, rather than by electing noble leaders.

There’s simply no justification for the assumption that politicians will be better than the rest of us. Sometimes politicians will make better decisions than the majority; sometimes worse. Representative democracy is still two wolves and a lamb voting on what to have for lunch, but with some slack in decision-making that may occasionally save the lamb when the wolves have only a fleeting craving.

As Crampton has argued, government implies a trade-off between the costs of populist democracy and self-serving politicians. When we give politicians more power in an attempt to reduce the mob-rule nature of democracy, we enable them to take advantage of the rest of us. As long as we have government, we can only ever strike a balance between these problems, never avoid both (unless we can elect wise and benevolent philosopher kings, of course, which seems to be the preferred option of many).

Still, it’s nice to see something other than democratic cheerleading from the MSM. I particularly like Misa’s conclusion:

As the philosopher and writer Ayn Rand observed, “Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by the majority (and the smallest minority on earth is the individual).”

I find her proposed solution (and Rand’s, for that matter) hopelessly utopian, however. As long as we have government, there’s no way to navigate between the problems of mob rule and arbitrary power and have an acceptable degree of freedom.

Sounds like a good reason not to have government to me.

The Political Power of Bad Ideas: Networks, Institutions, and the Global Prohibition Wave

That’s the title of  a forthcoming book by Mark Schrad, which looks very interesting. I’ve read a paper on this topic by the author, which has been very useful to the chapter I’m currently writing of my thesis (basically analyzing the consequences of  what Schrad calls “bad policy ideas” on constitutional effectiveness). I really wish the book were out now. Here’s the blurb:

In The Political Power of Bad Ideas , Mark Lawrence Schrad looks on an oddity of modern history–the broad diffusion of temperance legislation in the early twentieth century–to make a broad argument about how bad policy ideas achieve international success. His root question is this: how could a bad policy idea–one that was widely recognized by experts as bad before adoption, and which ultimately failed everywhere–come to be adopted throughout the world? To answer it, Schrad uses an institutionalist approach, and focuses in particular on the US, Russia/USSR (ironically, one of the only laws the Soviets kept on the books was the Tsarist temperance law), and Sweden. Conventional wisdom, based largely on the U.S. experience, blames evangelical zealots for the success of the temperance movement. Yet as Schrad shows, “prohibition was adopted in ten countries other than the United States, as well as countless colonial possessions-all with similar disastrous consequences, and in every case followed by repeal.” Schrad focuses on the dynamic interaction of ideas and political institutions, tracing the process through which concepts of dubious merit gain momentum and achieve credibility as they wend their way through institutional structures. And while he focuses on one episode, his historical argument applies far more broadly, and even can tell us a great deal about how today’s policy failures, such as reasons proffered for invading Iraq, became acceptable.

Finally, A Candidate I Can Offer My Unqualified Support

I urge all Americans to vote for Nobody in 2010. If you’re outside the States, you can also vote for Nobody in your local election. Nobody runs everywhere, and you don’t even need to turn up to the polling booth in order to vote for Nobody.

Minority Rights are Anti-Democratic

Robert Dahl knows his democratic theory, so we should take notice when he argues that the protection of minority interests conflicts with democratic ideals. Writing in 1957 [gated], he says:

One problem, which is essentially ideological in character, is the difficulty of reconciling such an interpretation [of the US Supreme Court as protecting minorities] with the existence of a democratic polity, for it is not at all difficult to show by appeals to authorities as various and imposing as Aristotle, Locke, Rousseau, Jefferson, and Lincoln that the term democracy means, among other things, that the power to rule resides in popular majorities and their representatives. Moreover, from entirely reasonable and traditional definitions of popular sovereignty and political equality, the principle of majority rule can be shown to follow by logical necessity. Thus to affirm that the Court supports minority preferences against majorities is to deny that popular sovereignty and political equality, at least in the traditional sense, exist in the United States; and to affirm that the Court ought to act in this way is to deny that popular sovereignty and political equality ought to prevail in this country. In a country that glories in its democratic tradition, this is not a happy state of affairs for the Court’s defenders; and it is no wonder that a great deal of effort has gone into the enterprise of proving that, even if the Court consistently defends minorities against majorities, nonetheless it is a thoroughly “democratic” institution. But no amount of tampering with democratic theory can conceal the fact that a system in which the policy preferences of minorities prevail over majorities is at odds with the traditional criteria for distinguishing a democracy from other political systems.

Why are so many unwilling to admit the conflict between liberalism and democracy? I’m bloody sick of “democracy” being used as a synonym for “good.”

Individual Rights: Minority Imposing its Views on Majority

This from Jesse Reynolds at Biopolitical Times (repsonding to this from Ron Bailey) is one of the more stupid democratic totalitarian arguments I’ve heard (and yes, it does mention the Peter “The Root of All Evil” Thiel):

Public opinion surveys show that an overwhelming 85 to 90 percent of Americans are opposed to human reproductive cloning and would like to see it banned, whereas only a tiny percentage would like to engage in the activity. This opposition is certainly not a radical ideology.

Furthermore, the US’s lack of any governance of powerful reproductive and genetic technologies–a remarkable exception among industrialized nations–is praised by Bailey as

a good thing too, since lack of government intrusion allows for the expression of moral pluralism. So far, at least, with regard to many biotechnical advances, the majority in the U.S. doesn’t get to impose its values on the minority, as has happened in many other countries.

In other words: Fortunately, with regard to many biotechnical advances, the minority in the US has so far been able to impose its values on the majority, unlike what has happened in many other countries.

Such opposition to democracy is not surprising, given Bailey’s transhumanist agenda. He knows that his vision is not popular. In order to implement it, experts such as himself and fellow anti-democratic libertarian Peter Thiel must be trusted and given authority, lest the wishes of the unreliable and ideological masses actually be enacted.

If I’m reading this correctly, Reynolds sees the maintenance of a private sphere beyond the reach of majoritarian interference as repression of the majority by the minority. That seems to be a pretty common, and utterly insane, view among democraphiles.

Do these people really not see the difference between denying a person the right to live her own life and denying the majority, acting through the state, the right to control the lives of others? Bailey and Thiel don’t want “authority” over anything except their own lives.

Exit, Voice, and Liberty

There’s been some interesting, and heated, debate in the libertarian blogosphere about the importance of democracy to freedom. Will Wilkinson suggests that since charter cities (and presumably seasteads) are undemocratic, they might allow rulers of authoritarian regimes to reap the benefits of high economic growth without giving their subjects “real freedom.” I think Will’s point that charter cities may allow illiberal regimes to create market-facilitating institutions and increase economic freedom (most often good for dictators) while ignoring civil liberties (most often bad for dictators) is important.

Will seems to think that an important aspect of freedom is democracy, though, and that’s what has caused the debate. Arnold Kling argues that real freedom is exit, not voice. Charter cities and seasteading aim to make exit easier and thus remove the need for democratic voice:

The exercise of voice, including the right to vote, is not the ultimate expression of freedom. Rather, it is the last refuge of those who suffer under a monopoly. If we take it as given that the political jurisdiction where I reside is a monopoly, then perhaps I will have more influence over that monopoly if I have a right to vote and a right to organize opposition than if I do not.

The idea of charter cities (or seasteading) will be a success to the extent that it creates a viable exit option vis-a-vis government. … In fact, if we had real competitive government, then we would be no more interested in elections and speaking out to government officials than we are in holding elections and town-hall meetings at the supermarket.

Will Chamberlain and Patri Friedman expand upon Arnold’s argument at A Thousand Nations; Wilkinson responds to Arnold here. All of these posts, including the comments, are well worth reading. I’m with Arnold and the other competitive government types and I have little to add to their joint efforts.

As a side note to the debate, though, I think Wilkinson is right to suggest that exit, narrowly conceived, is not enough to produce real freedom. Seasteading aims to do more than simply make exit easier; it’s about producing the technology to lower barriers to entry in the governance market.

Most people are free to exit their jurisdictions (county, state, country) and move to another (albeit at a fairly large cost). What they are not free to do, though, is to start their own country. This is why Will’s second-guessing of Arnold’s commitment to exit as freedom on the basis that he hasn’t left his county are so off-base. A major reason for jurisdictional exit’s failure to do much to enhance freedom today is the poor selection of products in the governance market. Even with zero relocation costs, I only have the choice among some really bad autocracies and a fairly homogenous set of liberal democracies. It’s not simply freedom of movement (exit, narrowly conceived) which enhances freedom, but meaningful choice.

The only way I can see of getting meaningful choice of government is to lower the barriers to entry.  When there are literally a thousand forms of government from which to choose – and the possibility of creating your own if none are quite right – you’re surely orders of magnitude freer than you are today, even with freedom of movement and the cost of relocation remaining constant.

You think voice is important for liberty? Fine! Go somewhere with voice. I disagree, and strongly suspect that the bloated and liberty-restricting governments (relative to my standard of what a government should be, not to any actually existing governments) that we see today are pretty much an inevitable outcome of democratic decision-making. The only places to which I can currently relocate in order to get away from democracy, though, are even worse.

I don’t much care for voting and would prefer to live under a government run like an insurance firm. I think even voluntary governments run democratically will be subject to the problems of expressive voting and rational irrationality (see my somewhat related arguments here and here), and will therefore fail to satisfy people’s true preferences. If I’m right, we won’t see too many democratic seasteads survive too long: people will voice their prejudices and then exit once they realise they have to pay the cost.

The beautiful thing about competitive government is that we don’t need to argue about who’s right. I could be wrong, and maybe voting will prove to be an important part of freedom. I just don’t see, though, how one can maintain that voice is just as fundamental as exit (defined widely as freedom of movement combined with low barriers to entry in the market for governance). If you start with only the capacity for exit, you can move somewhere which gives you voice. If you begin only with the capacity for voice, there’s no obvious way to get the capacity for exit. This asymmetry is crucial: exit can give you any other freedom, including voice. Competitive government isn’t about securing any particular freedom, but giving people the freedom to choose whether or not they want other freedoms. Exit, thus conceived, is the most fundamental freedom.

Coherence versus Political Reality

Arnold Kling tries to categorize current attitudes towards markets and state intervention as combinations of three points on an ideological triangle; Libertarian, Conservative, and Progressive:

1. Point L, where you believe that markets are effective at processing information and solving problems. This position is to take a radically pro-market view, and to let markets fix their own failures.

2. Point C, where you believe that tradition incorporates the evolved use of information to solve problems. This position is to be very cautious about overthrowing existing institutional arrangements.

3. Point P, where you believe that expert technocrats should be in charge. You are comfortable with throwing out tradition and markets in order to cede power to experts.

I think something like this would be the best framework within which to think about policy, but I think it only works as a descriptive model of actual beliefs for a small subclass of people: those with both a decent knowledge of the social sciences and a broadly consequentialist worldview. Politics as it’s practised on the ground isn’t a competition between alternative coherent worldviews, but competing myths, symbols, and identity groups.

The difference between Arnold’s description and political reality is most obvious in the case of conservatives. Hayekian conservatism is certainly a reasonable argument against the reformist zeal of either libertarians or progressives, but most self-identified conservatives surely don’t base their preference for existing institutions and norms on arguments from institutional evolution. They see existing institutions and norms as right – not merely stable equilibria which it would be unwise to mess with.

Arnold is talking about policy, but politics is an entirely different thing.

Customer-Owned Protection Agencies

I suggested yesterday that protection agencies which credibly commit to not joining any nascent cartel are likely to attract more customers than those which don’t, potentially nullifying Cowen and Sutter’s critique of market anarchism. One obvious possibility is customer ownership of protection agencies. Cowen makes this suggestion in the final paragraph of his 1992 paper:

In the above scenarios, the network becomes a government because network shareholders are able to exploit successfully conflicts between network profit maximization and the interests of network consumers. If consumers are sufficiently far-sighted, they may prefer dealing with agencies that precommit to never becoming collusive or coercive. Consumers may attempt to control the network by owning the member firms; under this scenario, the protection agencies would become mutuals or cooperatives. Protection agencies could then be bound by democratic procedures, according to consumer vote. Collusion could not occur unless approved by agency customers (shareholders).

He expands a little in a footnote:

In mutuals, the corporation’s customers are also its owners. A mutual life insurance company, for instance, is owned by its policyholders, who serve as residual claimants. If the company makes money, the profits are refunded in the form of lower premiums; conversely, losses imply higher premiums. (Not all of the mutual’s profits are rebated to customers, however, as managers retain perks for themselves.) In so far as mutual shareholders succeed in controlling their company, their dual roles as owners and customers diminish conflicts of interest. Policies that deliberately defraud customers, for instance, would not be approved by mutual shareholders. Shareholders of traditional corporations, in contrast, will maximize profits at the expense of consumer interests, when possible. Cooperatives and nonprofit organizations are other possible organization forms for protection agencies. Although these forms differ from mutuals with respect to many details, they also eschew direct profit-maximization and allow managers to maximize the flow of perks, although subject to different institutional constraints.

Customer ownership of protection agencies is probably the simplest and most effective way of avoiding a despotic cartel emerging from libertarian anarchy. The problem with such arrangements, though, is that they introduce many of the same problems which currently plague democratic politics.

Customer-shareholders need some way of making sure management acts in their best interests. The most obvious way of doing this, as Cowen suggests, is to have shareholders periodically vote for the CEO, or directly vote whenever particularly important decisions arise. As in any firm, this won’t entirely prevent managers from exploiting their position, but it will place fairly tight limits on the extent of corruption.

Whenever a moderately large group of people vote to decide some course of action, no individual is faced with a genuine choice of which path to take. They can express their preference, but, except in the case of an otherwise tied election, the outcome will be unrelated to their choice. This means that nobody has an incentive to think carefully about their decision, and have every incentive to vote expressively and indulge their irrational biases. This has been well-documented with respect to ordinary democratic politics, but is relevant to any large-group voting situation.

This doesn’t seem to be particularly important in ordinary shareholder voting (though as far as I know, nobody has looked into it and I can imagine it having some effect), presumably because voting rights are allocating by the share rather than the person – giving those with the most at stake the most say – and because the activities of corporations don’t tap into expressive preferences or cognitive biases to the same extent as democratic politics.

Unfortunately, collective choice within customer-owned protection agencies more closely resembles political than shareholder voting in this respect. While customers with more expensive premiums may be given extra votes, the inequality of voting power will be nowhere near that of an ordinary corporation. Further, law enforcement and the definition of rights seem like areas in which expressive preferences are likely to dominate.

Expressive shareholders will not only make protection agencies run inefficiently, they will also be more likely to violate the rights of others and engage in destructive conflict. People are more bigoted and bloodthirsty when freed of cost considerations. These are problems we live with under democratic rule today, however, and it’s hard to see why they would get worse under anarchy. While anarchy with customer-owned protection agencies will be far from perfect, it should be considerably better than centralized government.

Protection agencies will initially behave like lots of little governments, with all the inefficiency and bigotry we see in politics today. The crucial difference, though, is the option of exit. A thousand nations will bloom and efficient protection agencies – those managing to minimize the harm of foolish voters and corrupt managers – will gain more customers than inefficient ones. This could result in many small agencies which give each customer a significant voice, or agencies with supermajority rules and other limits on strict majoritarianism. Of course, the potential for innovation will be lower than in a market with entrepreneurs making profit-seeking decisions. People will flock to efficient agencies, but agencies’ decision rules will be unresponsive to consumer demand.

There may be ways for an ordinary shareholder firm to credibly commit to avoid a cartel, and the market would provide every incentive entrepreneurial discovery. I can’t think of any entirely plausible way, but that doesn’t mean one doesn’t exist. We might see a customer-ownership equilibrium eventually give way to a shareholder equilibrium once commitment mechanisms are devised.

I do have some niggling concerns over collective action problems (one shareholder-only firm would be more efficient than its competitors, would have no peers with which to form a cartel, and would therefore be attractive to customers when all other firms are customer-owned), but it seems that customer-owned anarchy would be preferable to the status quo, and would improve over time.

This is why I am now a tentative anarchist.

Libertarian Music Friday: Democracy Edition

The Adolescents – Democracy:

Lunch Democracy

For a cuter and less switchblade-intensive version of Spider Jerusalem’s critique of democracy, it’s hard to go past this video:

Milton Friedman is not as cute, but is probably smarter: