EconTech

In some ways, I would give democracy a little bit more credit. In other ways, a little bit less.

For more credit, we could turn to Sen, his analysis of famine and democracy, and the now famous remark that ‘democracies don’t have famines.’ To some extent, this is an extension of ‘interest group politics,’ remarked on below. However, only in the sense that any given policy will have an interest group, loosely worded. To me, starving people are not an interest group in the same way that the UAW is an interest group. So, the effective regulation of market prices (if you haven’t read Sen, he shows that famine is not the result of food shortages in the sense of there not being enough food to go around, but result from shortages in an economic sense, where food prices rise above what the poor (usually urban, if not unlanded rural laborers) can afford. If you are curious, this finding is robust to differences in country income.) in times of need is at least one function of democracy. That might seem a narrow case, but it is a good case for exemplifying the EFFECTIVENESS of democracy as a system of governance. Authoritarians are no fan of famine (instability is not good for your continued rule), but they are nevertheless inefficient at getting things done to prevent the mass starvation of their people. Yes, this speaks to the ridiculous antics of the national security authoritarians who think they can create some sort of secret inner-government that can be more effective than democracy when centuries of experimentation has shown such ventures to be rather fallible.

This also speaks to Cowen’s claim that democracy is ineffective at fine-tuning economic policy. I will not claim that the House of Representatives are a group with an excellent track record of economic policy-making. However, we have, through democratic means, built a number of rather strong institutions for dealing with economic policy. I would like to see Cowen point out a non-democracy with stronger, more effective economic institutions than ours. Certainly, I can think of countries with better economic institutions than ours, but they are all democracies.

However, this analysis only shows democracy in light of its instrumental value, the end goal of which is ‘good governance’ or similar. Rodrik (among others) would, rightly, object. Democracy has intrinsic value for instituting and vetting mechanisms for procedural justice. Notions of fair procedure differ from society to society, but they are often very strong. When violated, they often cause much more uproar than when the outcomes seem unjust despite a fair procedure (e.g. we still want the ‘caught on video’ guilty to get a jury trial).

I do not want to be too strong in my endorsement of democracy, however. It certainly has intrinsic value, but I would not argue that it is an ‘ultimate’ value. That is, there are rights which ‘we’ (either Americans via the Bill of Rights and other documents, or humanity via the Universal Declaration of Human Rights) consider to be beyond the touch of democratic rule. This is an oft found conflict in American politics (school prayer, to some extent evolution in schools, etc.) that is not easily resolved because there are interest groups who desire to usurp the rights that have been delineated as un-surpable. They constantly try, often successfully due to, at least, localized majorities but are turned back by courts due to the clearly established rights. Thus, built in to the structure of our democracy is this unresolvable conflict that will continue to plague us for the foreseeable future (assuming the increasingly conservative Supreme Court doesn’t sell out our rights to their grandstanding supporters). As a matter of logic and political theory, I would like to see a way of resolving this conflict. As a matter of politics, I do not expect or need for this conflict to be settled.

Thus, I find the limits of democracy to not be in its instrumental value (though it certainly has its limits there) but that it is not even of ultimate intrinsic value. Nevertheless, I suspect Tyler and I agree on this more than this post makes out.

John Edwards and the virtues and limits of democracy

Mark Thoma writes: “I’m getting pretty tired of Democrats caving in on important issues rather than standing up and fighting for their core principles…”  The lesson is that politicians’ core principle is reelection and pandering, not promoting the ideas of Mark Thoma or Paul Krugman or for that matter Milton Friedman or Tyler Cowen.

I find the (former) support for John Edwards to be one of the most striking features of the primary season.  Although Edwards ran an explicitly progressive campaign, a great deal of his (meager) support came from Democrats in lower socioeconomic strata.  They were voting their demographic, or perhaps their feelings of victimization, rather than their ideology.  (Here is Chris Hayes on John Edwards, worth reading.)  There is no large-scale progressive movement coalescing around stagnant median wages and the inequities of skill-based technical change.  Instead we have Hillary Clinton insulting Barack Obama, and maybe it is working.

The lesson is this: democracy is a very blunt instrument.  Especially as it is found in the United States, democracy just isn’t that smart or that finely honed or that closely geared toward truth or “progressive” values.  (NB: Democracy in smaller, better educated, ethnically homogeneous nations is, sometimes, another story.)

But unlike one of my esteemed colleagues, I believe that we should revere democracy as one of the modern world’s greatest achievements.  We should step off a British Airways flight with a tear in our eye, in appreciation for all that country has done to promote democratic government (sorry, former colonies, but perhaps you are democratic today).  This is no exaggeration or blog tease: I want to see you crying at Heathrow.  The future is far more likely to have “too little democracy” than “too much democracy.”  I do believe in checks and balances, but within a broadly democratic framework, such as we have in the United States.

That all said, we should not demand from democracy what democracy cannot provide.  Democracy is pretty good at pushing scoundrels out of office, or checking them once they are in office.  Democracy is also good at making sure enough interest groups are bought off so that social order may continue and that a broad if sometimes inane social consensus can be manufactured and maintained.  We should expect all those things of democracy and indeed democracy can, for the most part, deliver them.

But democracy is very bad at fine-tuning the details of economic policy.  Democracy is very bad at bringing about political solutions which are not congruent with the other sources of economic and social influence in a country.  The solution is not to be less democratic, but rather to appreciate democracy for what it is good for.  And the excesses of democracy should be fought with ideas, albeit with the realization that not everyone will be convinced.  Those are the breaks, as democracy needs all the friends it can get.

Just as I love democracy, so do I love Chiles in Nogada.  But I do not ask that Chiles in Nogada can solve most of the world’s problems or for that matter get me to work in the morning.  Social democrats and progressives often view democracy as a potential instrument of control, and as a way of giving us “the best policies.”  I do not, and that includes for my own economic views as well.

Here is Matt Yglesias on libertarianism and democracy.  Here is a Hilton Root review of the new Michael Mandelbaum book praising democracy.