Disenfranchising America's Great Democracy
William H. Peterson
by William H. Peterson
In 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 majoritarianism?
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 — voilą — 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.
Still, 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 democracy.
March 29, 2007
William Peterson [send him mail] is an adjunct scholar at the Ludwig von Mises Institute and the 2005 Schlarbaum Laureate.
Copyright © 2007 William H. Peterson