Democracy in practice, problems
All of the different types of existing democracy (participative, representative, direct and their variants) are based on the creation of a State that regulates, coordinates and controls life in society within a determined territory. To summarise, the State is created in order to protect us from aggression, nature and other human beings, those within our borders in addition to those outside of them. It therefore is providing a coactive power, or imposing adherence to it’s principles and norms through the use of force or threat.
The State, legitimised by the power citizens allow it, also acts as a mediator and judge in cases of conflicts and as a regulator in the “market failures.” It’s exactly this acting and intervening in the economy proclaiming to defend general interest that inevitably fails time after time due to the reasons I will put forward in this essay.
Karl Marx said that: “The State isn’t a realm of reason, but of force, it’s not a realm of the common good but of partial interests, it’s purpose isn’t the well being of everyone but of those who unlawfully hold power, it’s not the departure of the state from nature, but it’s continuation in another form.”  On the contrary, the State’s departure from nature will coincide with it’s end.
It’s surprising to me that Marx could see the problem with such clarity, but made such an absurd error, with devastating consequences for many societies that applied his ideas to their politics. I don’t use the adjective “absurd” gratuitously, as it contradicts all human logic to criticise something and then offer it as a solution. If for example we consider alcohol consumption as something harmful, it would be illogical to offer as a solution the comsumption of more alcohol, irrespective of the fact that it being called cognac (bourgeoisie) or vodka (proletariat).
In the middle of the last century, the economic method known as “Public Choice Theory” (the theory of public election) started to be applied to political science as a result of the studies of Scottish economist Duncan Black and American James. M. Buchanan. Buchanan’s work earnt him the Nobel prize for economics in 1986. This school uses economic science as a tool to examine the political processes in developed societies that are applied to democratic political systems as well as the behaviour of different implicated agents; the voters, the politicians and the bureaucrats.
The intention was to determine if, assuming that the market (where agents pursue their own interests) has flaws, these are more or less harmful for citizens than the supposed benefits derived from the intervention of the State (That is supposed to be in pursuit of the general interest.) To put it another way, they wanted to clarify if the remedy is better or worse than the supposed illness.
The identified the five following problems:
1. The rational ignorance of voters.
This is a consequence of the voters feeling that their vote is irrelevant as the probability of theirs being the deciding vote in the elections is almost nil. Theorists don’t criticise those who vote or not, they simply affirm that people don’t vote in a rational way and with awareness of the cause, given that the majority of citizens find the benefit of being politically aware insignificant and think that it’s not worth the immense effort of studying the manifestos of all the different parties (their implications the profile of different candidates, a study of different economic theories, etc.). Ultimately, it’s not perceived to be worth bearing these costs because the subsequent benefit will not be received: to decisively influence the final result of the elections.
Theorists of public elections haven’t been able to determine what motivates people to vote, perhaps we consider it is our “democratic responsability” or maybe it’s just for mere entertainment. As the elections don’t happen very often, they produce certain excitement and satisfaction with participating in the democratic process and expressing our preferences. In any case, people vote based mainly on intuitive, emotional considerations without a general rule of rational motives.
– Personal opinion:
Without doing a scientific study I get the impression that this problem of the irrationality of voters, instead of reducing as the voter ages and therefore aquires more knowledge, experiences and a higher level of consciousness, worsens as many young people have a critical approach to politics that is lost with age. Young people are more likely to have a more open mind disposed to learning and changing their mind.
On the other hand, as we get older perhaps as a consequence of “wisdom syndrome” we stop listening to people who don’t share our opinions, creating for ourselves a sort of monopoly of truth. As Bertrand Russel would say: “The fundamental cause of trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.”
2. Existence of interest groups or lobbies.
This refers to physically or legally relatively small groups of people with very concrete interests, like for example obtaining aid, subsidies, tax exemptions or any other type of privelige from the State which is very beneficial for them and costs citizens relatively little as it’s divided amongst the entire population, “benefits are concentrated while costs are diffused” (Buchanan). Lola Flores saw this issue of concentrated benefits and diffused costs clearly: “If every Spanish person gave me a peseta… I could pay my debt”. Unfortunately for “La Faraona” that didn’t have a good lobby…
To disguise fraud, goverments argue that the issue of aid or subsidy to determined interest groups is for the common good or noble and justified causes. These favours, or priveliges from the State to the aforementiones interest groups often come back in the form of financial contributions for election campaigns, payment of commissions, votes, roles in leading positions (revolving door) etc.
What’s most serious about these politics is that democracy has already been hijacked, even before a political party has been elected and finds themselves indebted to many of these interest groups that have hoisted them into power and therefore lack freedom to attend to the needs of the people.
3. Non-binding democratic representation.
In practice this means giving blank cheques to governments, which results in a lack of incentive to fulfil promises.
Consequently, we see during the election period politicians making all kinds of promises, identifying interest groups and potential voters to “buy” or win votes, but once the elections have been won, due to non-binding representation, they don’t have any obligation to fulfil their promises and even do the complete opposite. By doing a short memory exercise we can clearly observe the lack of compliance with political promises and the systematic breach of the majority of electoral promises.
Again, so the deception isn’t so obvious that they will seem like liars, that would suppose they would be decredited and have limited options to be re-elected, they argue that “circumstances have changed in unforeseen ways” that “although you don’t like it, there’s no other option” and even use fear culture and even go as far to say hardly less than the human race will vanish if they don’t do it in order to justify why they can’t adhere to the policies they promised to.
4. Government myopia.
Politicians that possess power opt almost exclusively for measures that result in an immediate benefit and have a distant cost, they therefore reject applying politics with immediate costs and benefits that are more distant in time. This is due on one hand to the government lacking interest or incentive in improving the country long-term, as the short-term is so temporary, precisely the next elections, and on the other hand the public tends to demand immediate results.
The will be people that may think that the long term doesn’t matter, among them the now deceased economist John Marnard Keynes with his famous phrase, “in the long run we are all dead.” But this means that our children and grandchildren who are around longer will then receive the results (and debts!). of our actions.
5. Bureaucrats and civil servants.
Despite criticism of these agents often coming from the public, theorists from the school of thought of public election don’t criticise individuals but the system, coming to the conclusion that the bureaucrats and officials lack incentive to act in an efficient way.
The main problem is that the public administration doesn’t find itself in a competition free environment where economic calculation is possible with market prices where considerations about benefits and costs tend to take precedent in decision making.
As their money isn’t at risk and there’s no pressure of competition, the tendency of uncontrolled growth of costs and deficits, the continual increase of functional structure, realisation of monumental works during good times, the multiplication of bureaucratic bodies and nepotism are all inevitable effects of bureaucratic behaviour. We also must bear in mind that if a department or ministry doesn’t spend all of the budget, this is “lost” returning the central administration, this amount most likely being reduced the following year. This, along with the largest budget meaning the msot power, incentivises bureaucrats to spend it in any way possible. All of this results in the majority of countries in the European Union these days now“eating” practically half of what their economies produce (GDP).
For the civil servants’ part, unlike with those that work in the private sector, they lack incentive to innovate, introduce improvements or take on certain risks when there is perhaps no compensation to be gained from doing so, neither do they wish to jeopardise their position. I would like to repeat that this generalisation doesn’t seek to personally criticise civil servants as they’re acting in a completely rational way. It’s not that there’s a lack of commitment, the problem is the system of incentives that in the long run diminishes productivity.
To these five points I’d like to add the additional problem produced as a consequence of State intervention in the economy.
– Restriction of democracy, altering the free will of citizens and consumers.
As the State coactively intervenes in the market artificially modifying the likes and preferences of consumers and therefore creating injustice, the free market should have made other decisions without intervention.. If, for example, the State decides to subsidise particular businesses from the agriculture sector, be it through the concession of financial aid or protectionist policies (tariffs and quotas) in defense of the nation’s economy, claiming that otherwise they wouldn’t remain in the market, the State is therefore taking the economic sector or taxpayer’s resources where the country is competitive and therefore sustainable. Also the State is negatively impacting the consumer who freely chose out of all the products available to them not to buy from these businesses due to the price or quality or any other moral/ethical reason.
In a truly free market, the real power resides with the consumers (citizens) who through the act of consuming decide which businesses, products and services should stay in the market and those which need improvement or even be abandoned.
In a free market environment, without the concession of monopolies. special rights or any kind of privileges by the State, no business no matter how big and powerful will last long in the market if they don’t offer a good service that satisfies the needs of the consumers and citizens.
In fact, big businesses aren’t interested in free competition. They find it more worthwhile to organise themselves in small interest groups or lobbies to buy favours from politicians (protectionist policies, subsidies, tax exemptions) establishing important barriers to economic sectors where they operate and avoiding potential competition from new businesses than to need to continually invest large amounts of resources in RDI, training employees etc. It’s clear that this free market economy doesn’t currently exist as all the capitalist economies of the “free”market have an important degree of State interventionism.
Theorists of the school of public election have come to the conclusion that the mistakes caused by State intervention in the economy are much more serious than those the eventually would have occurred in the private sector (imperfect competition, externalities etc).
To be concluded…
 El Filósofo y la Política. Antología, Editorial Fondo de Cultural Económica, México, 1996 1ª Edición.
Article written by:
Jorge Pérez Montes
Affiliated with The Individual Freedom Party in Spain
Translated from Spanish by Robyn Emily Darbyshire within the PerMondo initiative, supported by Mondo Agit SL