Disenfranchising America's Great Democracy

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a recent Wall Street Journal op-ed, ex-Congressman and former
Buffalo Bills quarterback Jack Kemp comes out four-square against
protectionism and economic nationalism. He opts instead for globalization
and free trade, citing as defenders of the faith Milton Friedman
and Ronald Reagan.

Mr. Kemp also
takes the GOP to task for harboring protectionists in high places,
naming names, if overlooking the Bush White House itself, which
imposed steel and lumber import restrictions for a time and still
has in place other trade and investment restrictions across the
world. So the outright protectionist Dems and less protectionist
Republicans in effect tell American consumers: Go hang!

With an eye
on already heating-up politics in the 2008 presidential race —
such as ranting over “Two Americas” (the rich and the unrich) and
its alleged market income disparity (and so seeking to further
justify protectionism — Mr. Kemp says America could beat back
attacks on its premier economic standing in the world with sound
money, lower taxes on capital and labor, less regulation, and more
mutually advantageous international trade and investment with nations
like Japan. Bully for Mr. Kemp.

Still, what
Mr. Kemp does not do is to plumb the anti-democracy edge in GOP
and Democrat protectionist plays. Anti-democracy? In America? To
borrow a line from CNBC TV host Lawrence Kudlow, this is the greatest
story that has never been told.

For I ask:
Does America worship a demigod via our media, legislatures, and
textbooks — a narrow one-sided message of “Democracy,” silent on
its seamy side of patronage-peddling, often in the guise of “campaign
donations”? Yet the stilted message goes out to a vast but not always
perceptive audience of young and old.

Read then
the prescient pitch on political democracy by Benjamin Disraeli,
young novelist, thinker, and back-bench Tory M.P. (later twice becoming
British Prime Minister) in the House of Commons, March 31, 1850:

“If you establish
a democracy, you must in due time reap the fruits of democracy.
You will in due season have great impatience of the public burdens,
combined in due season with great increase of public expenditure.
You will in due season have wars entered into from passion and not
from reason; and you will in due season submit to peace ignominiously
sought and ignominiously obtained, which will diminish your authority
and perhaps endanger your independence.”

Look here
in 2007 and see how the prescient Benjamin Disraeli hit the bull’s
eye 157 years later. Or note the corroborative editorial on democratic
and other politics in the London Times, February 7, 1852:
“Concealment, evasion, factious combinations, the surrender of convictions
to party objects, and the systematic pursuit of expediency are things
of daily occurrence among men of the highest character, once embarked
in the contentions of political life.”

Thus does
political democracy tend to give way to the tyranny of the statist
quo that gets to exploit the exploitable — you and your fellow citizens.
Isn’t this the portent of Disraeli’s foresight and that London
Times editorial on the individual’s fix under winner-takes-all

Note too how
similar on political democracy were earlier thinkers. Plato, for
example, charged it in his The Republic (c. 370 B.C.), as “a charming
form of government, full of variety and disorder, and dispensing
a kind of equality to equals and unequals alike.” As did Aristotle
in his Rhetoric (c. 322 B.C.), saying democracy “when put to the
strain, grows weak, and is supplanted by oligarchy.”

Or check later
thinkers like George Bernard Shaw who faulted political democracy
in his 1903 Maxims for Revolutionists for switching to “election
by the incompetent many for appointment by the corrupt few.” Or
hear H. L. Mencken put down the broad citizenry in do-in-the-other-guy-prone
democracy as “booboisie” or an election as “an advanced auction
of stolen goods.”

Or check on
how America’s Framers themselves saw self-ruin in political democracy
for the way many voters embrace “factions” or special interests,
inadvertently undercutting their own liberty. James Madison led
his peers in No. 10 of The
Federalist Papers
, seeing democracies as “spectacles of
turbulence and contention [which] have ever been found incompatible
with personal security or the rights of property; and have in general
been as short in their lives as they have been violent in their
deaths.” So wasn’t James Madison also prescient, saying there is
no there there in political democracy?

No wonder
the very word “democracy” is nowhere to be found in the Declaration
of Independence, Constitution, and Bill of Rights. And notice how
sternly anti-democratic are the first five words of the First Amendment
on bills abridging freedom of religion, speech, press, assembly,
and petition: “Congress shall pass no law …. Repeat, “no law.”
So Ben Franklin, asked outside Independence Hall what kind of state
the Framers had provided, replied with a famous proviso: “A republic,
if you can keep it.” Big if. I think Old Ben was warning us: As
political democracy swells the individual shrinks. I agree
with Old Ben: A limited — tightly limited — republic
is the thing.

Yet — voil
— see Austrian economist Ludwig von Mises light up a practically
unknown yet highly effective daily democracy. In 1922 in his book
Socialism he saw it in ’round-the-clock market action. See
it yourself from voting in today’s supermarket to the shopping mall,
to ordering merchandise by telephone, to online stock trading, to
getting colas at vending machines, to getting cash at an ATM, to
filling up at the gas pump by credit card, to business consumers
ordering manpower, supplies, equipment, and office/factory space
to meet perceived consumer demand.

So consumers
vote not but every other year as in federal elections but again
and again every day in an endless mindboggling 24/7 plebiscite,
one featuring a 100 percent daily turnout compared to but something
in the 50 percent range in quadrennial presidential elections. President
Calvin Coolidge sensed the daily explosion of what is going on when
he told the American Society of Newspaper Editors in 1925: “The
chief business of the American people is business.”

Mises thus
sought to give market/pocketbook democracy a political edge via
popular and intellectual perception, or as he put it in Socialism:
“When we call a capitalist society a consumers’ democracy we mean
that the power to dispose of the means of production, which belongs
to the entrepreneurs and capitalists, can only be acquired by means
of the consumers’ ballot, held daily in the marketplace.” Mises
hailed this system of daily voluntary market democracy as a victory
of “consumer sovereignty” and broad-based “social cooperation.”
E.g., cooperation via actively trading goods and services which
peacefully and productively cross and recross international borders
here and abroad, so knitting nations together.

Thus Mises
was on the mark as was his student, Nobel laureate F. A. Hayek,
author of the 1944 hit book The
Road to Serfdom
with his profound chapter on “Why the Worst
Get on Top.” Hayek hailed the integrated domestic and international
market for its “spontaneous order” and high productivity. Hayek
flayed state planning and protectionism as unworkable, while he
saw market competition as most workable, as “decentralized planning
by many separate [private] persons.” Separate and private like yourself.

Yet note vital
underpinnings to market democracy in the Founding Fathers’ implementations
of habeas corpus, the rule of law, a bill of rights, and other checks-and-balances
limits on political democracy — limits which since have broken down,
partly due to constitutional amendments such as the 14th prohibiting
states from not upholding due process, the 16th federal income tax,
and the 17th direct election of senators, all three further centralizing
power in Washington, all three passed in the noble name of democracy.
Standard defined democracy as noble? Oh sure.

For check
the Greek roots of democracy: Rule or “kratia,” by the people or
“demos.” And ask today in Washington and your state capital: Who
really rules whom? How does politics get to advance one intervention
after another? Why do government hegemony, intervention, bureaucracy,
regulationism, special interests, deficit finance, and progressive
— not even flat — income taxation persist in America today and across,
with variations, the democratic West.

mirabile dictu, the West overall — thanks mainly, I say, to
competition for foreign and domestic capital investment — perceptively
shifts toward more globalization via freer trade and greater international
investment, judging from the 2007 Index of Economic Freedom published
by the Heritage Foundation and the Wall Street Journal. As
Wall Street Journal editorial page director Paul Gigot says
in its foreword: “The pace of world trade continued to accelerate,
and millions more of the world’s poor entered the middle class.”

Three cheers
then for the Mises perception of workhorse market democracy reflecting
free markets, free minds, free trade, a moral code, and private
property rights in glorious action — all, it seems to me, neither
widely understood nor much appreciated today. Yet all still serve
as a somewhat battered fount of our wellbeing, all hit by heavy
government intervention including heavy government spending and
resulting heavy taxation. Also not helping matters are fallible
businessmen such as those at now defunct Enron.

So I trust
in the heat of current debate on economic policy that market/pocketbook
democracy as a viable concept can be reborn, rethought, and reinforced.
It could happen with, among other things, the run of Mises Institute
board member Congressman Ron Paul (R-TX) in the Republican presidential
primary. Mr. Paul loves the concept and reality of our giant
other democracy.

I conclude:
Jack Kemp is on to something big seeing how economic freedom here
and abroad — and not economic isolationism and protectionism — ties
into prosperity, productivity and peace itself. (Thomas J.
Watson, the founder, head, and thinker of IBM, put it best, coining
and long promoting the motto of “World Peace Through World Trade.”)

Remember then
that market democracy is the economy of the individual such as yourself,
free to choose, to vote your pocketbook every day over and over
in market democracy. It follows, as night does day, that protectionism
and other interventions spell a loss of civil rights — disenfranchising
We The People more and more from our giant other democracy, the
free market.

So free trade
and free investment here and abroad play key parts in the global
marketplace at eager work, a vast positive-sum game in which you
are a daily player — and winner. See then this giant marketplace
as a never-closing highly dynamic 24/7 market polling place — America’s
virtually unknown, unrealized, yet its freest and most moral knowing

29, 2007

Peterson [send him mail]
is an adjunct scholar at the Ludwig von Mises Institute and the
2005 Schlarbaum Laureate.

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