National Democracy or Ten Percent?

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There is a myth in the American air that democracy is a good and decent form of government. The President heaps praise on democracy, contrasting it with authoritarian regimes. In so many words, he tells us that democracy is the antidote to terror. Hillary Clinton wants America to have "true democracy," in which "all citizens are able to participate fully in the lives of their country." Even Churchill’s backhanded quip that democracy is the worst form of government, except for all the other forms, places democracy on a pedestal.

The National Democracy story

There are many storylines that glorify democracy. I will spin out one of them called National Democracy. The story starts with the notion that 300 million Americans can live, to a significant extent do live, and surely should live in some sort of national democratic "city" that is country-wide. This National Democracy is thought to be an ideal situation or as close to ideal as we are likely to get.

In this story, there is a National Agenda. We somehow bring up important social and public matters. (This part of the story is shrouded in mystery.) These become the objects of fruitful public discussion. They are items like affordable health care, the war on terror, energy independence, global warming, fiscal discipline, judges, and abortion.

We inform ourselves on these issues. We carry on a public conversation about these public issues. This is free speech. It is noisy at times but it is open. The collective mind of the public and its public opinion arises and connects through polling, letter-writing, testimony, and other pressures to dedicated public servants called legislators. These wise men and women take a public view. These seasoned craftsmen of laws take public opinion into consideration, but they are not wholly ruled by it. An issue ferments under their mature view.

Through an intricate process of checks and balances, we cast out the worst or bad ideas. Acting wisely but firmly, the grey and wise hairs among us whom we have elected then decide the issue. This process results in resolving the issue and raising the social welfare. In the aggregate we are better off for having gone through the process. This is the basic presupposition of National Democracy.

The losers on an issue go home to lick their wounds and battle another day, perhaps joining with those who fought them on this issue. They are satisfied that they have fought the good fight. It was a fair fight. They are ready to obey the general will. Unity of nation must prevail. The law must prevail. Laws are above men, and the legislators have given us the laws that we wanted. The people prevail. No one would even think of rebelling against this that is called the rule of law. Even seriously questioning the process of National Democracy itself is out of bounds.

Occasional glitches occur. Programs fail or do not work as expected. There are voting irregularities, inept politicians, plays for power, uncomfortable court decisions, street demonstrations, etc. These are all part of the democratic game. The system is not perfect. We have to keep working at it constantly. But the basic system of National Democracy is sound, only needing occasional amendment. There is no problem that cannot either be handled or improved.

The procedures by which National Democracy is carried out are free and fair. They take on a life of their own. Freedom is virtually thought of as these procedures. Anyone meeting certain minimum qualifications can run for office. Anyone can contribute to the public discussion. Freedom of political expression prevails. Anyone can form groups and parties. There are established rules of elections. There is constitutional process. Elections are peaceful. Officeholders come and go peacefully. Clear voting rights are maintained. There is freedom to obtain information.

National Democracy wraps the political process in a mantle of freedom, fairness, and equality. This enormously enhances its appeal and legitimacy. Indeed, freedom, fairness, and equality become absorbed into the very notion of National Democracy! National Democracy, which in reality pushes people and property around through a process of power, instead becomes the valued procedures by which the democracy is effected. If you are for freedom, you must be for National Democracy. National Democracy is freedom. In one breath, President Bush is "encouraging democracy in that region [the Middle East]. In the next breath, he says "Freedom has determined enemies…" In one breath he appeals to "democratic progress" and in the next he speaks of the "appeal of freedom."

This then is the storyline of the social-political process I’ve called National Democracy: Public issues constantly bubble up and are decided in a free and fair fashion. National Democracy is what freedom is. Society is the better for it. The 300 million move onwards and upwards. They believe that their prosperity owes to their form of government, their beloved National Democracy. They live happily ever after.

Puncturing the myth

Rather than point out each and every fallacy in the myth of National Democracy, I will simply say that nearly every element of it is either outright false or badly misleading. The activities that make the story sound plausible do occur in some form, just as fictional characters speak dialogue written on someone’s word processor and move to their marks on the stage under direction. But generally speaking, power, money, and parties control the agenda and the candidates. The welfare of some groups rises and that of other groups falls as a result of legislation. The country progresses because people work to better themselves, not because they vote Kennedy, Johnson, Nixon, Carter, Reagan, Bush I, Clinton, and Bush II into office, or because Congress passes law after law that retard progress.

The main element that falsifies the story is that the democracy merely fills the offices of the government, and the government has no resources of its own. It can only take what its citizens produce. And if, as is the rule, it misuses what it takes, then it lowers social welfare. And the very taking of the property of citizens, by being an act of theft, reduces their social welfare since they generally prefer that theft be forbidden.

Any government at all that is run on the democratic principle of majority rule, no matter how free and fair it is, no matter how limited it is at its inception, will turn into a tyranny. I define a tyranny as any form of government that either has progressive income taxes or takes more than 10 percent of a man’s income in taxes or both.

A democratic government offers profit opportunities through the taking of private property. This taking requires the formation of a coalition that succeeds in getting enough votes to change the rules that limit the government’s power of taking private property. After the rules are changed, then a coalition can vote to seize the property of other people and distribute it to themselves. In this way, the democracy legalizes criminality and theft.

The ever-present incentive to take property by force of law and government is what undermines any democratic government.

For this process to become significant will probably take time. It will probably require disguising. It may require shocks or purported shocks to occur that stampede the society into approving the requisite legal changes. However, the size of the prospective gains, which encompasses the society’s total wealth, is so great that the incentive to take it will eventually win out. Tyranny will come to pass, sooner or later. It will be sooner, rather than later.

Most countries have constitutions that write redistributions of wealth into the basic law at the outset. They usually focus power in a small group. They usually have plenty of loopholes by which the government can expand. These measures simply institute the tyranny right away or hasten its onset.

America has a representative democracy. Hillary Clinton is among those who want a "true democracy." This means extending the democracy to more voters and voting on more wealth transfers. It means moving more toward direct democracy. This hastens the transformation of democracy into tyranny.

It doesn’t matter a great deal to the final social outcome if we have direct democracy. "True democracy" is a sideshow. The most important issue concerning democracy is this: What shall be voted on? If we vote on taking each other’s private property, then the government, even if democracy, is unjust at the root.

No matter what form of political government is in place, it needs to be severely limited and there must be checks upon its powers or else freedom is undone. And if we vote on what can be voted on, as democracies do, the results will end up startlingly bad. They will end up in tyranny.

All possible freedom, fairness, and equality within the political process of democracy will not eliminate the central problem of government in general and democratic government in particular, which is the incentive to take the private property of others.

Bush falsely identifies democracy with freedom. Freedom to run for office, to speak out, and to vote are all well and good. But they aren’t all of what freedom is. Freedom means controlling one’s life and property. Bush’s version of democratic freedom isn’t much good when one has to pass one’s life living under a tyranny. And most democracies are tyrannies.

Tyrannies have their limits. There is an ebb and flow when it comes to government. We are in the flow stage at present, looking for the ebb. There also seems to be a central tendency of tyranny. The average historical take of a tyrannical government might be a tax rate of something like 25—50 percent. Rates higher than this induce rebellion. Rates lower than this whet the appetite of the criminals in government.

10 percent

My 10 percent figure is not entirely arbitrary. It is significantly less than the 25—50 percent area. (The U.S. has about 50 percent.) It is equivalent to a tithe. But the other thing about it is that it is concrete. It is good to fix ideas. So I say that taxes higher than 10 percent constitute a tyranny. And progressive taxes automatically indicate tyranny by discriminating against those with more property.

It might be thought that 10 percent is a clear target to shoot for. It might even be thought to be a way to limit government constitutionally for a time, by writing a 10 percent limit into law. However, such a limit would not work. At the first "emergency," the law would have to be changed. Suppose a war occurred. The sentiment to change the law would be very great. Once the law was changed, this precedent would change the momentum toward large government again.

The notion of a relatively small expenditure on government-type activities of 10 percent or less is best something held in the minds and hearts of a country’s people, not written into a constitution. A man with $40,000 income might be quite willing to pay $2,000 a year for local police services and $2,000 a year for regional defense services.

Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York.

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